In an 8 page decision dated October 19, 2016, Judge Carey of the Delaware Bankruptcy Court overruled an objection to the reclassification of the claim of a terminated employee. Judge Carey’s opinion is available here (the “Opinion”). This employee (“Mangan”) was a fifteen year veteran of the Debtor, and was entitled to 15 weeks of severance pay upon termination. That is not in dispute.

A recent decision by the United States Bankruptcy Court for the Western District of Texas in In re Sanjel (USA) Inc.,et al., Case No. 16-50778-CAG (Bankr. W.D. Tex. July 29, 2016) explains that in a Chapter 15 case, the U.S. bankruptcy court will not always apply the law of the foreign jurisdiction to U.S. creditors and U.S.-based claims.

On October 11, 2016, Chief Judge Brendan L. Shannon of the Delaware Bankruptcy Court issued a letter ruling in which he opined on the appropriate valuation of a first lien. A copy of the Opinion is available here.

“Equitable mootness” prevented the U.S. Court of Appeals for the Sixth Circuit from “unravel[ing] the entire Plan, … forc[ing] the City [Detroit] back into emergency oversight, and requir[ing] a wholesale recreation of the vast and complex web of negotiated settlements and agreements.” In re City of Detroit, 2016 U.S. App. LEXIS 17774, *14, *17 (6th Cir. Oct. 3, 2016) (2-1).

Arch Coal has announced that it has successfully completed financial restructuring and has emerged from bankruptcy. Shares of the reorganized company began trading last week on the NYSE under the ticker ARCH, according to the Wall Street Journal.

Summary

Over three years ago, in September 2013, Pirinate Consulting Group LLC, in its capacity as Litigation Trustee (the “Trustee”) of the NewPage Creditor Litigation Trust, began filing complaints in the Delaware Bankruptcy Court seeking the avoidance and recovery of what the Trustee alleges are preferential transfers.

“[T]he price received at a California tax sale” properly held under state law “conclusively establishes ‘reasonably equivalent value’ for purposes of” the Bankruptcy Code’s (“Code”) fraudulent transfer section (§ 548(a)(1)), held the U.S. Court of Appeals for the Ninth Circuit on Sept. 8, 2016. In re Tracht Gut LLC, 2016 WL4698300, at *1 (9th Cir. Sept. 8, 2016). Affirming the lower courts, the Ninth Circuit reasoned that “California tax sales have the same procedural safeguards as the California mortgage foreclosure sale” approved by the U.S. Supreme Court in BFP v.

“[T]he claims of [an individual debtor’s] general unsecured creditors are ‘senior to or equal [to]’” a defrauded investor’s security claim under Bankruptcy Code (“Code”) § 510(b), held the U.S. Court of Appeals for the Ninth Circuit on Aug. 22, 2016. In re Del Biaggio, 2016 WL 4435904, *9 (9th Cir. Aug. 22, 2016). The investor (“F”) had filed a claim against the debtor based on his wrongful failure to fund, through his affiliated limited liability company (“LLC”), his share in an acquisition venture with F.

On September 7-8, 2016, various debtors in the ADI Liquidation, Inc. (f/k/a AWI Delaware, Inc.), et al. bankruptcy proceeding filed approximately 332 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections 544 and/or 547, 548 and 550 of the Bankruptcy Code (depending upon the nature of the underlying transactions). The Debtors also seek to disallow claims of such defendants under Sections 502(d) and (j) of the Bankruptcy Code.