Disagreeing with the much-critiqued SDNY opinion in Enron, the SDNY bankruptcy court disallowed claims brought by secondary transferees because the original claimants allegedly received millions of dollars in fraudulent transfers and preferences from the Debtors that have not been repaid. Deepening the district spilt on the nature of Section 502(d) of the Bankruptcy Code, the Court held that the defense barring fraudulent transfer-tainted claims focuses on claims—not claimants—and cannot be “washed clean” by a subsequent transfer in the secondary market.

The Revenue Commissioners have issued some recent welcome clarifications about certain provisions of the Government's temporary wage subsidy scheme.

Application for the Subsidy Scheme – An Admission of Insolvency?

The main provisions of the subsidy scheme are set out in Section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020.

That section also contains the criteria for an employer's eligibility to avail of the subsidy scheme. One such criterion is that:

In the case of Wilson v McNamara [2020] EWHC 98 (Ch) the High Court of England and Wales (the Court) considered whether the EU principle of freedom of establishment requires that a pension held in another EU member state (Ireland) should be excluded from a bankruptcy estate under UK law in the same manner as a UK pension would be in a UK bankruptcy. Mr Justice Nugee decided in order to decide the case the Court needed to refer a preliminary reference to the European Court of Justice (CJEU) on a question of EU law.

Confirmation of a Chapter 11 plan generally requires the consent of each impaired class of creditors. A debtor can “cramdown” a plan over creditor dissent, however, as long as at least one class of impaired claims accepts the plan.

The consequences of an order or judgement being final or interlocutory are enormous. An order from an interlocutory order requires leave since these orders are not appealable as of right. In addition, a failure to obtain leave may result in the issue becoming moot. This is especially so when motions to lift the stay are involved: if the motion is denied and is not immediately appealable, by the time the case is concluded, the issues will most likely be moot.

The Second Circuit Court of Appeals recently held in In re Tribune Company Fraudulent Conveyance Litigation, No. 13-3992-cv (L) (2d Cir., Dec. 19, 2019) that Bankruptcy Code Section 546(e) barred claims seeking to avoid payments made by Tribune to its shareholders as part of a leveraged buyout (LBO).

Yes, says the Third Circuit. The Third Circuit recently held that the Bankruptcy Court has the authority to confirm a chapter 11 plan which contains nonconsensual, third-party releases when such releases are integral to the successful reorganization. The court’s decision in In re Millennium holds that, when the third-party releases are integral to the restructuring of the debtor-creditor relationship, the Bankruptcy Court has the constitutional authority to approve nonconsensual, third-party releases.

Background

In the fifth opinion involving the repo liquidation saga of HomeBanc, the Third Circuit addressed several crucial issues involving the liquidation and valuation of repo collateral in bankruptcy. In re HomeBanc Mortg. Corp., 2019 WL 7161215 (3d Cir. Dec. 24, 2019).

Background

Introduction

Background

Following various disputes as to the scope of the collateral given to secured creditors, the debtors and certain of their noteholders jointly proposed a chapter 11. The plan included a rights offering that the consenting noteholders agreed to backstop. These consenting noteholders were granted the right to purchase significant equity of the reorganized debtors at a discount and receive significant premiums for their agreement to backstop the rights offering and support the plan.