In In re Filene’s Basement, LLC,¹ the United States Bankruptcy Court for the District of Delaware considered the rejection damages a landlord claimant was entitled to pursuant to Section 502(b)(6) of the Bankruptcy Code after the debtor rejected its lease as part of its reorganization plan.

Bankruptcy courts appear to be increasingly sending state law claims to the district court for final review, as illustrated by a recent decision from the bankruptcy court for the Southern District of Texas. In Gomez v. Lone Star National Bank (In re Saenz), Jose Gomez financed his acquisition of a restaurant from Humberto Saenz. When the restaurant failed, Gomez sued his lender and Saenz on various claims, but Saenz filed for bankruptcy protection. The lender then moved for summary judgment against Gomez’s claims for common-law fraud and negligence.

On March 10, 2015, the United States District Court for the Middle District of Alabama issued a memorandum decision in the case of Harrelson v. DSS, Inc. (No. 14-mc-03675), declining to withdraw the reference from the bankruptcy court and holding that the existence of an arbitration agreement and a class action waiver in that arbitration agreement did not require substantial consideration of the Federal Arbitration Act (FAA).

Facts

In a little-noticed November opinion, the Seventh Circuit greatly expanded the ability of a bankruptcy trustee to avoid a security interest for documentation errors under section 544(a)(1) of the Bankruptcy Code.  See State Bank of Toulon v. Covey (In re Duckworth), 776 F.3d 453 (7th Cir. 2014).

The Eleventh Circuit’s recent opinion in SE Property Holdings, LLC v. Seaside Engineering & Surveying, Inc. (In re Seaside Engineering & Surveying, Inc.), No. 14-11590 (11th Cir. March 12, 2015), clarifies the circuit’s stance on the authority of bankruptcy courts to issue nonconsensual, non-debtor releases or bar orders and the circumstances under which such bar orders might be appropriate. In addition, the court gave a broad reading of what it means for a plan to have been proposed in good faith.

The Eleventh Circuit’s recent opinion in SE Property Holdings, LLC v. Seaside Engineering & Surveying, Inc. (In reSeaside Engineering & Surveying, Inc.), No. 14-11590 (11th Cir. March 12, 2015), clarifies the circuit’s stance on the authority of bankruptcy courts to issue nonconsensual, non-debtor releases or bar orders and the circumstances under which such bar orders might be appropriate. In addition, the court gave a broad reading of what it means for a plan to have been proposed in good faith.

Last week’s Supreme Court arguments on bankruptcy jurisdiction in Wellness Int’l Network Ltd. v. Sharif, No. 13-935 (S.Ct.), are enough to strike fear into the heart of any bankruptcy buff. What emerges from the transcript of the oral arguments is, in a word, confusion. This bodes ill for an early resolution of the upheaval created by the Supreme Court’s decision in Stern v. Marshall, ___ U.S. ___, 131 S.Ct. 2594 (2011), limiting the power of bankruptcy judges to decide certain matters that arise in bankruptcy proceedings.

Changes may be coming to the Bankruptcy Code that may affect secured creditors.^[1] In 2012, the American Bankruptcy Institute established a Commission to Study the Reform of Chapter 11 (the “ABI Commission”). The ABI Commission is composed of many well-respected restructuring practitioners, including two of the original drafters of the Bankruptcy Code, whose advice holds great weight in the restructuring community.

More than seven years is a long time to wait for a loaned painting to be returned. But after such a long wait, Sandro Botticelli’s Madonna and Child (1485) is being returned to its owner, Kraken Investments Limited (Kraken).   Kraken had consigned the painting to a gallery for sale, but the gallery’s bankruptcy intervened.

Changes may be coming to the Bankruptcy Code’s safe harbor provisions.[1] In 2012 the American Bankruptcy Institute established a Commission to Study the Reform of Chapter 11 (the “ABI Commission”), composed of many well-respected restructuring practitioners, including two of the original drafters of the Bankruptcy Code, whose advice holds great weight in the restructuring community.