The Momentive Decisions: Cram-Down Interest Rates and Make-Whole Mania

On Saturday, June 28, Puerto Rico Governor Alejandro Garcia Padilla signed into law the euphemistically-named “Puerto Rico Public Corporation Debt Enforcement and Recovery Act” (the “Act”).

stale-mate

[steyl-meyt]

noun

In its recent decision, Executive Benefits Insurance Agency v. Arkison (In re Bellingham Insurance Agency, Inc.),¹ the Supreme Court reiterated and expanded on the reasoning in Stern v.

Last week at the American Bankruptcy Institute meeting in Washington, D.C., our firm co-sponsored and participated in a mini-conference on bankruptcies that involve FCC-regulated companies. This was an opportunity to spend a few hours contemplating issues that practicing attorneys rarely get a chance to reflect upon in the midst of heated, multi-party bankruptcy proceedings.

In another judicial decision springing from Lehman Brothers, as a result of the likely surplus in the estate of Lehman Brothers International (Europe) (in administration) (LBIE) after all the provable debts have been paid, Mr Justice Richards has issued a ‘statement of conclusions’ in what is called the Waterfall Application. A more detailed judgement is expected in late March 2014. We summarise the conclusions below.

Ranking and Contributions of Shareholders of Inlimited Companies

According to a recent report issued by the American Bankruptcy Institute, there was a 24 percent drop in business  bankruptcy filings in the United States last year, resulting in the fewest filings since 2006. The larger corporate  filings in 2013 were not the typical “mega” filings of years past. Unlike Lehman, Chrysler, Tribune, MF Global  and others, the chapter 11 “mega-cases” filed in 2013 were smaller and less well known in the general business  community. Among the more prominent were Cengage Learning, Excel Maritime, and Exide Technologies.

A New York bankruptcy court has ruled that certain victims of Bernard Madoff’s highly publicized Ponzi scheme are not entitled to adjust their claims to account for inflation or interest. Securities Investor Protection Corporation v. Bernard L. Madoff Investment Securities LLC, 496 B.R. 744 (Bankr. S.D.N.Y. 2013). The Madoff Liquidation Trustee brought the motion asking the court to determine that Madoff customers’ “net equity” claims did not include “time-based damages” such as interest and inflation under the Securities Investor Protection Act (“SIPA”).

On March 12, 2009, Gerald Rote and Annalisa Rote  loaned $38,000 to their daughter and son-in-law to buy  a home. The Rotes took a mortgage on the home but, to  avoid the expense of publicly recording the mortgage,  they did not immediately record it. Rather, they waited  two years, until May 4, 2011, to record the mortgage.  Seven months later, however, the daughter and son-inlaw filed a bankruptcy petition.