Indenture trustees and agents participate in the administration of chapter 11 cases in a number of ways, including by protecting holders’ rights, ensuring compliance with the applicable indenture and other agreements, and fulfilling their duties and responsibilities under applicable law.

The Eleventh Circuit recently found in favor of Blue Bell Creameries, Inc. by rejecting its own earlier dicta and explicitly expanding the preference payment defense known as “new value.” This provides additional protection for companies doing business with a debtor in the 90 days prior to bankruptcy.

THE SCOOP: BRUNO’S V. BLUE BELL

In a recent opinion, United States Bankruptcy Judge Martin Glenn of the Southern District of New York held that Bankruptcy Courts may enter final default judgments against non-US defendants who fail to respond to a properly served summons and complaint.

In so holding, the Court sanctioned the lender’s motive of purchasing claims to block the plan for the purpose of protecting its own existing claim. The Court held that the relevant bad faith inquiry under 11 USC § 1126(e) requires a motive which is ulterior to the purpose of protecting a creditor’s economic interest in a bankruptcy proceeding.

Background

The lender held a senior lien fully secured by the debtor’s real property. The debtor’s proposed “cramdown” plan sought to extend and modify the terms of the mortgage without the lender’s consent.

On May 22, 2018, the United States Court of Appeals for the Fifth Circuit issued its decision in Franchise Services of North America v. United States Trustees (In re Franchise Services of North America), 2018 U.S. App. LEXIS 13332 (5th Cir. May 22, 2018). That decision affirms the lower court’s holding that a “golden share” is valid and necessary to filing when held by a true investor, even if such investor is controlled by a creditor.

Honorable Martin Glenn, United States Bankruptcy Judge in the United States Bankruptcy Court for the Southern District of New York (“Bankruptcy Court”) granted Avanti Communications Group PLC’s (“Avanti”) request to recognize the UK court-sanctioned scheme of arrangement and enforce the guarantee releases provided by Avanti’s affiliates on certain debt.[1]

What happens to the a licensee’s right to use a trademark if the licensor files for bankruptcy?

The Circuit Courts of Appeal have split on whether a prepetition transfer made by a debtor is avoidable if the transfer was made through a financial intermediary that was a mere conduit. Today, the Supreme Court unanimously resolved the split by deciding that transfers through “mere conduits” are not protected. This is a major (and adverse) decision for lenders, bondholders and noteholders who receive payments through an intermediary such as a disbursing agent.

The Year Brick & Mortar Got a Bankruptcy Makeover

What Fashion and Luxury Goods Companies Need to Know About Restructuring and Bankruptcy

Los Angeles / New York / San Francisco / Washington, DC

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Introduction

Understanding the Issues, Causes, Tools for Distressed Retail Situations & What Lies Ahead for 2018

In a previous article, The Eagle and the Bear: Russian Proceedings Recognized Under Chapter 15, we discussed In re Poymanov, in which the Bankruptcy Court (SDNY) recognized a Russian foreign proceeding under chapter 15 of the Bankruptcy Code even though the debtor had only nominal assets in the United States (the “Recognition Order”). The Bankruptcy Court had declined to rule upon recognition whether the automatic stay under 11 U.S.C.