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.
On May 29, 2012, in RadLAX Gateway Hotel, LLC v. Amalgamated Bank, the United States Supreme Court unanimously held that a debtor may not confirm a chapter 11 plan of reorganization providing for the “free and clear” sale of a secured creditor’s collateral, without permitting the secured creditor to credit bid at the sale.
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).
On March 13, 2012, Judge Richard J.
On November 18, 2011, U.S. District Judge William H. Pauley III of the Southern District of New York granted the requests of the attorneys general of New York and Delaware to intervene in the proceeding seeking approval of an $8.5 billion settlement between Bank of America Corp. and the Bank of New York Mellon, as trustee for several trusts that issued Countrywide Financial Corp.
On December 1, Bankruptcy Rule 2019 became effective. This rule relates to the disclosure requirements in Chapter 9 and Chapter 11 cases for holders of distressed loans and eliminates the requirement for the disclosure of the price paid for a claim in bankruptcy and the date the claim was acquired (except in very limited circumstances) in Rule 2019 verified statements. Rule 2019.
In a case of first impression, a U.S. bankruptcy court charged with enforcing the rights of a foreign insolvency administrator against assets in the United States has held that foreign insolvency law may not be invoked to cancel the rights of licensees of U.S. patents.
Judge Buchwald of the U.S.
On September 13, 2011, Judge Mary F. Walrath of the United States Bankruptcy Court for the District of Delaware granted standing for an equity committee in In re Washington Mutual, Inc. (“WaMu”) to seek “equitable disallowance” of claims held by noteholders that had traded claims after engaging in negotiations with WaMu over the terms of a global restructuring.