On April 29, 2013, the Supreme Court of the United States declined to hear an appeal of the Second Circuit's decision dismissing, as equitably moot, appeals arising out of the bankruptcy of Charter Communications and let stand the opinion in In re Charter Communications, Inc., 691 F.3d 476 (2d Cir. 2012). As a result, the application of the equitable mootness doctrine, as it applies to bankruptcy appeals, will continue to vary among jurisdictions.

Applying Minnesota law, a federal district court has held that, where an entity’s principal shareholder was insolvent, but the entity was not, the individual’s insolvency could not be attributed to the entity for purposes of establishing Side A coverage for “Non-Indemnifiable Loss.” Zayed v. Arch Ins. Co., 2013 WL 1183952 (D. Minn. Mar. 20, 2013). The court further held that allegations of fraudulent inducement did not trigger an exclusion for claims “arising from” contractual liability, but that the claim was uninsurable as matter of law.

The United States District Court for the District of Connecticut has held that a settlement agreement between the claimant and policyholder satisfies Connecticut’s direct action statute’s requirement regarding the need for an unsatisfied judgment. Tucker v. American International Group, Inc., No. 3:09-cv-1499, 2013 WL 1294476 (D. Conn. Mar. 28, 2013). Accordingly, the court permitted the claimant’s suit against the carrier to proceed.

Official committees of unsecured creditors (Committees) serve a vital role in protecting the rights of the general unsecured creditors during a chapter 11 bankruptcy case. 

INTRODUCTION 

In theory, when liquidating a succession, publication formalities must be observed so that the various creditors can present themselves and claim their due. This formality also gives the successors an overall view of the assets and liabilities of the succession before deciding whether or not to accept it.

On February 1, 2013, the Supreme Court of Canada released its decision in Sun Indalex Finance, LLC v. United Steelworkers^[1]. The ruling:

The United States Bankruptcy Court for the Eastern District of New York held that it had subject matter jurisdiction over a bankruptcy trustee’s adversary proceeding against the bankrupt entity’s insurer because the policy and policy proceeds were part of the policyholder’s bankruptcy estate.  EMS Financial Services, LLC. v. Federal Ins. Co., 2013 WL 64755 (Bankr. E.D.N.Y.  Jan. 4, 2013).

Applying California law, a California appellate court has held, in an unpublished opinion, that a judgment for reimbursement against an insured law firm was properly amended to name the sole equity partner of that law firm in light of his “pervasive” involvement in the underlying litigation and coverage litigation and his direction of such litigation in light of the fact that he knew the law firm was dissolved and had no assets.  Carolina Cas. Ins. Co. v. L.M. Ross Law Group LLP, 2012 WL 6555545 (Cal. Ct. App. Dec. 17, 2012). 

The United States District Court for the Eastern District of California, applying California law, has concluded that it should exercise jurisdiction under the federal Declaratory Judgment Act to determine the availability of coverage for a written demand and has held that the related coverage action should not be stayed in favor of potential future underlying litigation between the Federal Deposition Insurance Corporation (FDIC) and the insureds because the outcome of the coverage litigation would not be dependent on resolution of disputed facts in such a future action.  Progressiv

After reserving judgment for more than a year, the Supreme Court of Canada (“SCC”) has released its decision in the matter of Her Majesty the Queen in Right of the Province of Newfoundland and Labrador v. AbitibiBowater Inc., et al [1].