The United States District Court for the Eastern District of New York, applying New York law, has held that an insured did not violate an insurance policy's cooperation clause when it agreed, without providing advance notice to the insurer, to lift the automatic bankruptcy stay with respect to certain personal injury actions filed against it. Admiral Ins. Co. v. Grace Indus., Inc., 2009 WL 2222369 (E.D.N.Y. July 23, 2009).

In the last several months, a number of major mass media companies have filed for chapter 11 relief, including Ion Media Networks, Sun-Times Media Group, Tribune Company, Young Broadcasting and NV Broadcasting. With the economy still struggling to recover, and asset values continuing to decline, commentators speculate that even more mass media related bankruptcies are on the horizon. Certain aspects of a mass media bankruptcy present unique challenges for the various stakeholders due to the special regulatory requirements involved.

There are signs of hope in the aviation marketplace, with the slow return of financing and the apparent bottoming-out of aircraft values. Buying opportunities abound-but so do risks; and no situation is more frustrating than finding yourself "infected" by someone else's bankruptcy. Even if the market has reached its nadir, there are many companies that are simply not going to survive much longer in the market as it has been redefined.

The United States District Court for the Southern District of New York has affirmed a bankruptcy court's ruling that defense costs advanced by an insurer to a debtor under an Interim Fee Advancement and Non-Waiver Agreement (the Interim Agreement) were not held in trust and, therefore, constituted property of the debtor's estate. Great Am. Ins. Co. v. Bally Total Fitness Holding Corp. (In re Bally Total Fitness of Greater N.Y.), No. 09-CV-4052, 2009 WL 1684022 (S.D.N.Y. June 15, 2009).

Although the Companies’ Creditors Arrangement Act (“CCAA”) provides scant guidance, it is a well established procedure in a CCAA proceeding for the Court to order a claims process and to delegate powers to review creditors claims to a CCAA Monitor. Recognizing the gaps in the legislation, the Nova Scotia Supreme Court recently reviewed and clarified the basis of a Monitor’s authority to conduct a claims bar process in the CCAA restructuring of ScoZinc Ltd.

On July 27, 2009, Arclin Canada Ltd. and related Canadian entities filed under the CCAA in Ontario and related U.S. entities filed under Chapter 11 of the U.S. Bankruptcy Code in Delaware. Arclin announced that it had reached agreement with certain of its key senior lenders to reduce its debt from US $234 million to US $60 million and that it would receive a US $25 million debtor in possession (DIP) financing facility.

As we warned in our earlier articles, “Wage Earner Protection Program Act Comes Into Force - Secured Creditors Be Wary” and “Extension of the WEPPA – Further Protection for Employees”, the Wage Earner Protection Program Act (the “WEPPA”) took eff

The Nortel restructuring continues to be what many observers consider the most interesting Canadian restructuring in recent memory. Most recently, it was an international battle for certain of the once Canadian icon's valued assets.

Over the last few years, debtor-in-possession (DIP) loans have become a fixture in Canadian insolvency proceedings. Initially, in Companies’ Creditors Arrangement Act (CCAA) proceedings, courts used inherent jurisdiction to authorize DIP facilities because the statute did not expressly permit them. (Pending legislative changes will put explicit DIP provisions in the CCAA and the Bankruptcy and Insolvency Act (BIA).)

In the course of fewer than 60 days this summer, the North American automotive industry was fundamentally reorganized and restructured as both General Motors and Chrysler reorganized under Chapter 11 of the United States Bankruptcy Code. Ford was the only one of the “Big 3” not involved in a Court-driven restructuring. Both General Motors and Chrysler, of course, had and indeed continue to have substantial operations in Canada and the Canadian operations were a critical part of the overall restructuring of both companies.