In a recent decision1 in a claims objection proceeding in the Solutia chapter 11 case, the Bankruptcy Court for the Southern District of New York set clear limits on the allowance of secured claims.

In a closely watched case against Motorola, Inc. arising out of the Iridium chapter 11 case, Judge James M. Peck of the Bankruptcy Court for the Southern District of New York has adopted a market approach to determining prepetition solvency, finding “insufficient cause to set aside the verdict of solvency and capital adequacy already given to Iridium by the public markets.” In his 111-page opinion1 Judge Peck agreed with the Third Circuit’s approach in VFB LLC v.

In a decision rendered late last week, Judge Lifland of the Southern District of New York Bankruptcy Court refused to recognize under chapter 15 of the Bankruptcy Code, either as “foreign main proceedings” or as “foreign nonmain proceedings,” the well-publicized liquidations brought in the Cayman Islands by two Bear Stearns hedge funds that were victims of volatility in the sub-prime lending market.

On March 29, 2007 the Federal Government introduced Bill C-52: An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007 (Bill C-52). Bill C-52 amends the Bankruptcy and Insolvency Act (the BIA), the Companies’ Creditors Arrangement Act (the CCAA), the Winding-Up and Restructuring Act, the Canada Deposit Insurance Corporation Act (the CDICA) and the Payment Clearing and Settlement Act with respect to eligible financial contracts (EFCs).

In a groundbreaking, and somewhat surprising decision, the Delaware Supreme Court recently held that creditors of a company that is either in the zone of insolvency or actually insolvent cannot, as a matter of law, directly sue directors of the company for breaches of the directors’ fiduciary duties.

Ontario has introduced a series of significant amendments to the Personal Property Security Act (Ontario) (the PPSA). The last major amendments to the PPSA occurred in 1989. This Osler Update highlights amendments to the PPSA that are of particular interest to court officers of insolvent enterprises and others taking or enforcing security.

In a significant and somewhat surprising decision, the New York Court of Appeals recently held that, absent an express provision to the contrary, an individual lender in a syndicated loan is prohibited from enforcing its rights under the loan agreement or a related guaranty.

The United States Supreme Court has unanimously held that federal bankruptcy law does not preclude an unsecured creditor from recovering attorney’s fees authorized under a prepetition contract and incurred postpetition in bankruptcy-related litigation with the debtor.

I. In re Iridium Operating LLC

On Monday, U.S. District Court Judge Shira Scheindlin lifted a hold on a bankruptcy court order approving Adelphia Communications’ Chapter 11 reorganization plan, thereby enabling Time Warner Cable (TWC) to proceed Tuesday with plans to transform itself into a publicly-traded company. Although U.S. Bankruptcy Court Judge Robert Gerber signed off on Adelphia’s reorganization plan on January 3, Scheindlin—at the behest of bondholders who objected to the plan—had blocked implementation pending review of the bondholders’ claims.