Last Thursday, a Delaware Bankruptcy Court disqualified two law firms from representing an Official Committee of Unsecured Creditors based on their conduct in soliciting proxies from creditors who were not existing firm clients. In re Universal Building Products, No. 10-12453 (Bankr. D. Del. Nov. 4, 2010), involved an extreme fact pattern but it may nonetheless have a substantial effect not only on the selection of professionals for future Committees but also on the appointment of creditors to Committees, at least in Delaware.

Most polls, political pundits, and crystal balls are predicting a larger crowd on the Republican side of the aisle after the midterm elections, potentially giving them a majority in the House and tightening the margin in the Senate. The natural question that follows is what will happen to Dodd-Frank if the composition of Congress changes significantly? Is it possible that with a Republican majority the House may seek to repeal one of the most controversial pieces of legislation enacted by the Obama administration?

When we last left off, Judge Peck (SDNY) was foiling Cyrus Select Opportunities’ efforts to oppose Ion Media’s chapter 11 plan, while in the Northern District of Texas, Judge Jernigan was putting the stops on Michigan Retirement Systems’ attempt to thwart Erickson Retirement Communities’ allocation of value to PNC Bank

Last week the Supreme Court exercised its option to do nothing about a Seventh Circuit decision allowing the federal government to cram a $150 million remediation obligation onto a chapter 11 successor corporation – all because the feds chose to proceed under RCRA (the federal hazardous waste statute) rather than CERCLA (the Superfund cleanup statute). Smart tactics by the feds.

In re Leslie Controls, Inc., No. 10-12199 (Bankr. D. Del. Sept. 21, 2010), involved a very common scenario. A company in financial difficulty sought to negotiate a consensual restructuring with an ad hoc committee and, in that context, disclosed various confidential analyses. In this particular case, the company had asbestos exposure, the ad hoc committee represented asbestos plaintiffs, and the shared information included a memorandum and numerous e-mails concerning potential insurance recoveries under various bankruptcy scenarios.

The recent sale of the bulk of Connaught's failed social housing group has received a lot of positive press attention of late, due largely to the number of jobs the deal is reported to have saved.

The sale appears to have occurred within days of Connaught going into administration. While there has been no suggestion that the deal was effected as a "pre-pack", the speed with which the sale was carried out echoes the most prominent feature of true pre-pack deals.

In our e-update of 20 January 2010, we looked at a decision of the English courts from December 2009 in which it was decided that, in England, the Administrators of a tenant company are bound to account to the landlord of premises for rent due in relation to the period during which those premises are being used in connection with the administration, and that the rent is to be paid as an expense of the administration.

On July 13, 2010, the U.S. Court of Appeals for the Third Circuit held, in a landmark decision, that a plan sponsor which had the right to unilaterally terminate retiree benefits outside of bankruptcy could not exercise that same right during a bankruptcy proceeding. The case, IUE-CWA v. Visteon Corp. (In re Visteon Corp.), marks the first time that a Circuit Court of Appeals ruled against a bankrupt employer in its attempt to unilaterally terminate non-vested retiree welfare benefits.

Intercreditor agreements between first and second lien lenders are created all the time and are therefore not usually glitzy topics for client updates. But the recent intercreditor dispute between Donald Trump and corporate raider Carl Icahn over control of Trump's Atlantic City casinos had all the drama and glamour of the gambling dens and billionaires involved, including two competing but confirmable plans and senior and junior creditors vying for ownership of a gaming empire and its attendant upside.

On May 20, 2010 the Senate passed the Restoring American Financial Stability Act of 2010 (the "Senate Bill") 59-39, only hours after the cloture vote ended debate on the bill. The House passed its version—the Wall Street Reform and Consumer Protection Act of 2009 (the "House Bill")—in December 2009. The primary stated focus of the Senate and House Bills is to prevent the failure of the "too big to fail" institutions and to avoid government (taxpayer) bailouts in the future.