The “safe harbor” provisions of the Bankruptcy Code protect firms that trade derivatives, and other participants in financial and commodity markets, from the rigidity that bankruptcy law imposes on most parties. Since their inception in 1982, the safe harbor statutes have gradually grown broader, to reflect a Congressional intent of protecting against secondary shocks reverberating through those markets after a major bankruptcy. The liberalizing of safe harbors traces – and may well be explained by – the rapidly expanding use of derivatives contracts generally.

While the arrival of His Royal Highness Prince George Alexander Louis of Cambridge has dominated the British (and the world) headlines this week, the U.K. Supreme Court delivered its own long awaited bundle of joy earlier today. In the latest decision in the laborious Nortel and Lehman litigations, the U.K. Supreme Court reversed a lower court decision and held that pension claims should not be treated as priority claims and, instead, they should rank equally with general unsecured claims.

Thanks to Anna Nicole Smith and the June 2011 landmark Supreme Court decision in Stern v. Marshall, there are seemingly more questions regarding a bankruptcy judge’s authority to enter final orders (or even proposed orders) than ever before. Those unanswered questions have created considerable uncertainty and, not surprisingly, lengthier and costlier litigation in bankruptcy. Thankfully, the Supremes decided on June 24, 2013 that they will address two of the many questions left unanswered by Stern.

Navigating the most recent leg in the Quebecor regatta, the Second Circuit affirmed the judgment of the district court and ruled that prepetition transfers made in connection with a securities contract may qualify for safe harbor from avoidance actions under section 546(e) of the Bankruptcy Code—even if the transferee is a mere “conduit” or “intermediary” financial institution. In re Quebecor World (USA) Inc. (Official Committee of Unsecured Creditors of Quebecor World (USA) Inc. v. American United Life Insurance Co.), No. 12-4270-bk (2d Cir. June 10, 2013).

The Delaware Bankruptcy Court recently held that a third amendment to a lease agreement entered into for the purpose of leasing a second building could not be severed from the original lease agreement; and the debtor was not allowed to reject the lease on that second building under section 365 of the Bankruptcy Code.

It was just an old jalopy legally repossessed by his credit union . . . until he filed a bankruptcy petition and the red lights of the automatic stay started flashing. Smokey pulled the lender over and started issuing citations so be forewarned, put your hazard lights on and drive carefully through the postpetition fog, because this decision is relevant to all secured creditors under all Bankruptcy Code Chapters, not just car lenders under Chapter 13.

Oregon’s $29 million corporate excise tax claim against the taxpayers’ parent company was held to violate both the Due Process and Commerce Clauses of the U.S. Constitution by the U.S. Bankruptcy Court for the District of Delaware. Oregon claimed that Washington Mutual, Inc. (WMI) was liable for its subsidiaries’ tax because WMI had (as the parent corporation) filed consolidated corporate tax returns on behalf of itself and its subsidiaries and therefore could be held jointly and severally liable for the tax due.

In Ben Hur, Judah Ben-Hur’s team of white horses beat Messala’s black horses in the climactic chariot race. In a similar battle to the death in In re Indianapolis Downs, LLC, the white horses won again when Delaware Bankruptcy Judge Brendan L. Shannon confirmed Indianapolis Downs’ joint Chapter 11 plan of liquidation (the “Plan”) over a series of hard-fought objections focusing on the implications of a Restructuring Support Agreement and the propriety of third-party releases.

On January 4, 2013, the U.S. District Court for the Northern District of Illinois issued an opinion that strikes a significant blow against the rights of futures customers that might otherwise enjoy the Bankruptcy Code’s safe harbor protections. The opinion, arising out of the Chapter 11 bankruptcy case of Sentinel Management Group, Inc. (Sentinel), fashions a new exception to the safe harbor protections in the event of distributions or redemptions to customers of a failed futures commission merchant (FCM).

Last week the United States Bankruptcy Court for the Southern District of New York approved debtor-American Airlines’ motion to enter into a secured financing transaction and repay certain pre-petition aircraft financing without paying make-whole premiums. The indenture trustee sought to ground the motion by asserting that the make-whole had to be paid, but it was the indenture trustee, not American, that crashed and burned.