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Second Circuit Holds That Certain Private Student Loans May Be Dischargeable Under Section 523(a)(8)(A)(ii)

The Situation: In Homaidan v. Sallie Mae, Inc., et al., the U.S. Court of Appeals for the Second Circuit recently affirmed that certain types of private student loans are not "obligation[s] to repay funds received as an educational benefit, scholarship, or stipend" that are exempt from discharge in bankruptcy absent an undue hardship.

USA, Banking, Insolvency & Restructuring, Litigation, Public, Jones Day, Coronavirus, Supreme Court of the United States, Second Circuit
After a Peak Comes the Fall: Australian Federal Court Rejects "Peak Indebtedness Rule"

In Short

The Situation: The Full Court of the Federal Court has changed industry practice in Badenoch Integrated Logging Pty Ltd v Bryant, in the matter of Gunns Limited (in liq) (receivers and managers appointed) [2021] FCAFC 64 by holding that the "peak indebtedness rule" is not available to liquidators when assessing the value of running accounts in unfair preference claims. 

Australia, Insolvency & Restructuring, Litigation, Jones Day, Corporations Act 2001 (Australia)
Illinois Bankruptcy Court Examines Statutory Authority for Enforcing Foreign Bankruptcy Court Orders in Chapter 15 Cases

In cases under both chapter 15 of the Bankruptcy Code and its repealed predecessor, section 304, U.S. bankruptcy courts have routinely recognized and enforced orders of foreign bankruptcy and insolvency courts as a matter of international comity. However, U.S. bankruptcy courts sometimes disagree over the precise statutory authority for granting such relief, because the provisions of chapter 15 are not particularly clear on this point in all cases.

Germany, USA, Illinois, Insolvency & Restructuring, Litigation, Jones Day, Cross-border insolvency
Setoffs Under Shari'a-Compliant Investment Contracts Not Safe Harbored in Bankruptcy

In In re Arcapita Bank B.S.C., 2021 WL 1603608 (Bankr. S.D.N.Y. Apr. 23, 2021), the U.S. Bankruptcy Court for the Southern District of New York addressed the interaction between purported setoff rights arising under investment agreements governed by Islamic law and the Bankruptcy Code's safe harbors protecting the exercise of non-debtors' rights under financial contracts.

USA, Corporate Finance/M&A, Insolvency & Restructuring, Litigation, Jones Day, Supreme Court of the United States
In Brief: U.S. Supreme Court Declines Review of High-Profile Bankruptcy Rulings

Madoff

USA, Insolvency & Restructuring, Litigation, Jones Day, Supreme Court of the United States, Second Circuit
Bankruptcy No Sanctuary Against Government Enforcement Actions: NRA’s Chapter 11 Case Dismissed as Bad Faith Filing

Executive Summary

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Corporate governance
Debt or Equity? SDNY Bankruptcy Court Says “Debt” in a Recent Case Involving Recharacterization of a Party’s Debt Claim as Equity

Overview

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Bankruptcy, Debt, Coronavirus, United States bankruptcy court
Avoiding Foreign Transfers Based on Foreign Law Claims: Fairfield Sentry Cases Illustrate Broad Scope of Safe Harbor in Chapter 15

A series of related decisions issued by the United States Bankruptcy Court for the Southern District of New York in the ongoing Fairfield Sentry U.S. redeemer litigation — Fairfield Sentry II,1Fairfield Sentry III,2 and Fairfield Sentry IV3 — provide insight into, among other things, the interplay between the safe harbor provision of section 546(e)4 of the Bankruptcy Code (the “Safe Harbor”) and chapter 15.

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP
Executory or Not Executory? That is the Question - NJ Bankruptcy Court Rules That Court-Ordered Specific Performance Renders a Contract Non-Executory

In a recent decision, the U.S. Bankruptcy Court for the District of New Jersey denied a debtor’s motion to reject a contract as executory under section 365 of the Bankruptcy Code, holding that the prepetition entry of a court order which required specific performance of a contract rendered the contract non-executory and, therefore, non-rejectable. In re Bennett Enters., Case No. 20-23761 (JNP), 2021 Bankr. LEXIS 625 (Bankr. D.N.J. 2021) (“Bennett Enterprises”).

Background

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP
Transferring Personally Identifiable Information in Bankruptcy M&A - Part 3

With data privacy issues constantly in the news, what do businesses need to know about handling personal information when they’re considering bankruptcy, especially if some personal information – like customer records – may be a valuable asset?

USA, Corporate Finance/M&A, Insolvency & Restructuring, IT & Data Protection, Litigation, Weil Gotshal & Manges LLP, Due diligence, Personal data, Google, GDPR, California Consumer Privacy Act 2018 (USA)