This week, the U.S. House of Representatives passed the Asbestos Bankruptcy Trust Transparency Bill. The legislation would, if enacted into law, require bankruptcy trusts to file quarterly reports with bankruptcy courts disclosing the names, asbestos-related exposure history, and basis of the victim’s claims for each claimant. These reports would be made available on the courts’ public dockets. Confidential medical records or social security information would not be disclosed.

In an adversary proceeding filed in the American Home Mortgage Holdings, Inc. bankruptcy case, the Delaware bankruptcy court affirmed that triangular setoffs are not allowed under the Bankruptcy Code and cannot be modified by contract or under the Bankruptcy Code’s safe harbor provision. In re American Home Mortgage Holdings, Inc., et al., Adv. Proc. No. 11-51851 (Bankr. D. Del. Nov. 8, 2013). Two contracts were at issue – a swap agreement between a bank and American Home Mortgage Investment Corp.

On October 28, 2013, the Ontario Ministry of the Environment (MOE) announced that it had reached a settlement with the former directors and officers of Northstar Aerospace whereby those former directors and officers agreed to pay $4.75 million for costs associated with the remediation of contaminated lands owned by the now-bankrupt company. The Environmental Review Tribunal approved the Minutes of Settlement at the hearing held on October 28.

Upon the filing of an appeal of a bankruptcy order, that order is stayed pursuant to section 195 of the Bankruptcy and Insolvency Act (“BIA”). In Msi Spergel v. I.F. Propco Holdings (Ontario) 36 Ltd., 2013 ONCA 550, the Ontario Court of Appeal had to decide whether that stay suspends the limitation period applicable to a motion by a trustee to set aside a preferential payment by a bankrupt under s. 95 of the BIA.

In Burcam Capital II, LLC v. Bank of America, N.A., et al, No. 13-00063-8 (Bankr. E.D. N.C. Oct. 1, 2013), an adversary proceeding filed in In re: Burcam Capital II, LLC, No. 12-04729-8, in the United States Bankruptcy Court for the Eastern District of North Carolina, the court held that the Debtor Plaintiff alleged sufficient facts to support a claim that its lender and the special servicer of the loan breached their duty to act in good faith and to deal fairly.

A recent New York court decision has cleared the way for lenders to seek recovery against non-recourse carve-out, or “bad boy,” guarantors during a pending mortgage foreclosure action if a borrower files for bankruptcy. In so doing, the court answered a question that, surprisingly, was thus far apparently unanswered in a reported decision in New York: whether New York’s “one action rule” under RPAPL § 1301 bars a lender from obtaining a money judgment against a “bad boy” guarantor for the debt if a mortgage borrower files for bankruptcy while a foreclosure action is underway.

In a recent decision ^[1] arising from the In re Residential Capital LLC, et al.

In Virginia Broadband, LLC (Bankr. W.D. Va. Sept. 9, 2013), the unsecured creditors committee moved to dismiss an LLC’s chapter 11 bankruptcy case alleging a flaw in the authorization of the LLC’s bankruptcy filing caused by an authorizing member’s individual bankruptcy filing. Specifically, the committee alleged that when the authorizing member filed his individual bankruptcy case, Virginia law divested him of his non-economic (voting) rights in the LLC.

In In re Charles A. Grogan and Sarah A. Grogan, No. 11-65409 (Bankr. D. Ore. Sept. 10, 2013), the United States Bankruptcy Court for the District of Oregon confirmed the Debtors’ Third Amended Chapter 11 plan. The Debtors are Christmas tree farmers and their plan proposed to liquidate the majority of their Christmas tree farm and sell six major parcels of land. While the two main secured creditors were deemed to have rejected the plan, the court found the cram down standards of section 1129(b)(2)(A) were applicable.

The Seventh Circuit has explicitly adopted the Second Circuit’s broad interpretation of the terms “transfer” and “settlement payment” in the Bankruptcy Code’s safe harbor provisions. See Peterson v. Somers Dublin Ltd., No. 12-2463, --- F.3d ----, 2013 WL 4767495 (7th Cir. Sept.