In Cortlandt St. Recovery Corp. v Hellas Telecom., S.A.R.L., 2014 NY Slip Op 24268 (Sup. Ct., N.Y. County 2014), the Supreme Court of the State of New York ruled on two important issues related to the right to sue for recovery with respect to notes issued under indentures. First, the court held that assignments of a right of collection, but not title to the claims or the note itself, are insufficient as a matter of New York law to confer standing upon an assignee to sue for recovery on a defaulted note.
On June 20, 2014, the Texas Supreme Court issued its opinion in Ritchie v. Rupe, 2014 Tex. LEXIS 500 (Tex. 2014). In Ritchie, a minority shareholder in a closely held corporation attempted to force the majority shareholders to buy-out the minority shareholder’s interest in the corporation by bringing a claim of shareholder oppression under § 11.404 of the Texas Business Organizations Code (TBOC), the Texas receivership statute.
Finds Bankruptcy Court to be Proper Forum for Claim Objection Despite Forum Selection Clauses in Investor Agreements
The Southern District of New York recently reiterated the critical difference between creditor claims and equity interests in the bankruptcy context. In a recent opinion arising out of the Arcapita Bank bankruptcy case, the Court was faced with an objection to a proof of claim filed by an investor, Captain Hani Alsohaibi, who characterized his right to recovery against the debtors as being based on a “corporate investment.”
On June 4, 2014, the New York Court of Appeals will hear arguments arising from the bankruptcies of two law firms—Thelen and Coudert Brothers—as to whether the former partners of the bankrupt law firms must turn over profits earned on billable-hour client matters they brought to their new firms.
Following recall notices for its ignition switches in February 2014, General Motors, LLC (“New GM”) has been hit with at least 50 class actions and two individual suits in not less than 20 federal and two state courts asserting claims against New GM for defective vehicles and parts sold by Motors Liquidation Company, formerly known as General Motors Corporation (“Old GM”).
On April 17, 2014, the United States Bankruptcy Judge Sean H. Lane issued an opinion in the Waterford Wedgwood bankruptcy discussing at length one of the defenses available to preference defendants. The opinion turns upon the scope of “ordinary business terms,” the objective prong of the ordinary course of business defense.
A recent opinion out of the United States Bankruptcy Court for the Eastern District of Virginia (Richmond Division) serves as a reminder to secured creditors to steer clear of conduct that a bankruptcy court may deem inequitable and provide the court with cause to limit the secured creditor’s credit bid rights. In In re The Free Lance-Star Publishing Co.
The Ninth Circuit’s Bankruptcy Appellate Panel (BAP) recently upheld the disallowance of a credit union’s claims after the credit union’s “disgruntled employee” failed to file the proofs of claim before the claims bar date.
The case of Spokane Law Enforcement Federal Credit Union v. Barker (In re Barker) serves as a cautionary tale—reminding creditors and their attorneys of the importance of timely filing proofs of claim.
On Monday, March 10, 2014, the companies that own and operate the Sbarro pizza chain, Sbarro LLC and 33 affiliates, filed for bankruptcy reorganization under Chapter 11 of the federal Bankruptcy Code. The Sbarro companies operate 217 restaurants in the U.S. and there are 582 franchised restaurants, 176 in the U.S. and 406 at international locations.
The Court of Appeals of Wisconsin, applying Wisconsin law, has held that a policyholder's bankruptcy did not relieve an insurer of its obligations to pay for "loss" under a policy endorsement that included a bankruptcy provision.Hollingsworth v. Landing Condos. of Waukesha Ass'n, Inc., 2014 WL 839244 (Wis. Ct. App. Mar. 5, 2014).