Recently, the Bankruptcy Court for the Southern District of New York issued an opinion in In re Sabine Oil & Gas Corp.1 that permitted the debtor, Sabine Oil & Gas Corporation (“Sabine”) to reject certain gathering and condensation agreements as executory contracts under 11 U.S.C. § 365. Because the midstream service sector finances the construction of pipelines, the costs of which are recovered over the life of gathering agreements, the Court’s decision has the potential to lead to considerable upheaval in the energy sector.
Introduction
In March 2016, the U.S. Court of Appeals for the Seventh Circuit ruled that a landlord may be liable to a debtor’s bankruptcy estate for the value of a lease the debtor terminated early, holding the termination may be an “avoidable transfer” under the Bankruptcy Code.1 The opinion in Official Comm. of Unsecured Creditors v. T.D. Invs. I, LLP (In re Great Lakes Quick Lube LP)2 reversed the Bankruptcy Court’s ruling, and in doing so perhaps expanded the definition of a “transfer” under the Bankruptcy Code.
Background
In Walchuk Estate v. Houghton, the Ontario Court of Appeal dismissed a motion to quash an appeal on the basis that the lower court’s adjournment of a contempt motion was a final order. The decision also provides guidance, yet again, on the proper test for distinguishing between final and interlocutory orders.
Background
In 2003, Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (the "Act").1 The Act authorized states to create health savings accounts ("HSAs") with taxpreferred treatment to encourage individuals with high-deductible health insurance plans to save for their healthcare expenses.2 Recent data suggests that the popularity of HSA accounts is growing, with one study estimating that the number of HSA accounts rose to 13.8 million in 2014, which is a twenty-nine percent (29%) increase from 2013.
As you may know by now, many of the Official Forms for use in Bankruptcy Courts were replaced with revised, reformatted and renumbered forms that went into effect on December 1, 2015. The changes were made as part of a forms modernization effort that began in 2008 to improve the official bankruptcy forms and the interface between the forms and the courts’ case opening and electronic case management technology.
Cases decided recently in Florida and Illinois call into question one legal rule that some might have thought well-settled: a first-perfected security interest in collateral beats a later-perfected lien creditor's interest in that same collateral. Seems simple enough. Except this rule might not be followed in every State.
The media have been paying considerable attention to the current financial distress of the energy industry in Alberta, focusing primarily on the impact a company’s financial condition can have on its stakeholders, including its employees, shareholders and creditors. But there is another group that is also being affected: counterparties to commercial arrangements with insolvent companies. Increasingly, financially strong companies are having to deal with insolvent joint venture partners, financially distressed operators, and bankrupt lessees.
In Castellanos v. Midland Funding, LLC, 15-CV-559 (M.D. Fla. Jan. 4, 2016) the United States District Judge John Steele joined with several of his Middle District of Florida colleagues and held that the Bankruptcy Code preempts the FDCPA with respect to filing time-barred proofs of claim.
In Garfield v. Ocwen Loan Servicing, LLC, 15-527 (2d Cir. Jan. 4, 2016), the Second Circuit Court of Appeals examined whether a debtor who has been discharged in a bankruptcy can sue in a district court under the Fair Debt Collection Practices Act (“FDCPA”), as opposed to seeking relief in the bankruptcy court.