On August 2, 2012, the United States Court of Appeals for the Fifth Circuit issued a decision in the bankruptcy case for MBS Management Services, Inc. (the “Debtor”). The Fifth Circuit affirmed the district court’s opinion finding that an electric requirements agreement was a “forward contract” and, therefore, that payments made on the agreement were exempt from avoidance under the Bankruptcy Code.

I. Factual Background

The U.S. Court of Appeals for the Third Circuit ruled on May 1, 2012 that a provision of the U.S. Bankruptcy Code allowing the assignment of insurance policies as part of a bankruptcy reorganization overrides the anti-assignment clause of an insurance policy.  In re: Federal-Mogul Global Inc., No.

On May 25, 2012, Residential Capital LLC (“ResCap”) filed a complaint in United States Bankruptcy Court for the Southern District of New York seeking declaratory and injunctive relief to extend the automatic stay over 27 MBS lawsuits against it, its affiliates, and its executives while it undergoes bankruptcy restructuring.  ResCap alleges that all of the lawsuits against its non-debtor affiliates are inextricably connected to the debtor affiliates, and that such lawsuits will drain the debtors’ estates by forcing those entities to undergo extensive discovery and face significant indem

On May 29, 2012, the United States Supreme Court issued its much-anticipated decision in the Chapter 11 bankruptcy cases for RadLAX Gateway Hotel, LLC and its affiliate (together, the “Debtors”). The Court held that when a debtor proposes to sell a secured creditor’s collateral free and clear of the creditor’s lien pursuant to a Chapter 11 bankruptcy plan, the debtor cannot deny the creditor the opportunity to “credit bid” in the sale without cause.

In a decision of considerable importance for bankruptcy debtors and lenders, the Supreme Court handed down its ruling earlier today in RadLAX Gateway Hotel, LLC v. Amalgamated Bank, --- S.Ct. ----, 2012 WL 1912197 (2012). In this highly anticipated decision, the Supreme Court held that a debtor may not confirm a plan under the “cramdown” provision of 11 U.S.C. § 1129(b)(2)(A) where the plan proposes to sell a secured lender’s collateral without affording the creditor the opportunity to credit-bid for the collateral.

The bankruptcy case of TOUSA, Inc. and its various subsidiaries (collectively “Tousa”) is one where lenders have seen their fortunes rise and fall. On March 15, 2012, they fell again when the Eleventh Circuit¹ (the “Circuit Court”) reversed the District Court’s opinion and reinstated the Bankruptcy Court’s order, which had disgorged over $400 million from Tousa’s senior lenders and avoided certain guarantees and liens granted to them by the Conveying Subsidiaries (defined below).

A Ministry of Justice Report released in March 2012 has confirmed that the implementation of the Third Parties (Rights against Insurers) Act 2010 (the "Act") is to be delayed until 2013.

On March 13, 2012, Judge Richard J.

Introduction

A recent Court of Appeal case confirms that the Foreign Judgments (Reciprocal Enforcement) Act 1933 does apply to judgments in insolvency matters and that the Insolvency Act 1986 can be used to enforce a foreign judgment.

In New Cap Reinsurance Corporation Ltd & Anr v AE Grant & Ors [2011] EWCA Civ 971, the Court of Appeal upheld the first instance decision of the Companies Court that a judgment obtained in Australia could be enforced in England under section 426 of the Insolvency Act (the IA) and at common law.

NEW CAP RE: THE FACTS