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.

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.

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.

On October 17, 2014, the Delaware Supreme Court held that under the Delaware Uniform Commercial Code, the subjective intent of a secured party is irrelevant in determining the effectiveness of a UCC-3 termination statement if the secured party authorized its filing.[1]  

Background

Recent case law reminds practitioners and lenders to pay careful attention when drafting prepayment premium provisions in debt instruments or risk having the premiums disallowed in a borrower’s bankruptcy case.

In In re MPM Silicones, LLC, Case No. 14-22503 (RDD) (Bankr. S.D.N.Y. Sept. 30, 2014) (Momentive), the court dismissed a senior lien creditors’ suit alleging that the junior lien creditors breached an intercreditor agreement (ICA) with respect to shared collateral by taking and supporting certain actions adverse to the senior lien creditors.

BACKGROUND

In a recent decision welcomed by creditors, the United States District Court for the Eastern District of North Carolina reversed a bankruptcy court order confirming a Chapter 11 debtor’s plan because the debtor engaged in “obvious gerrymandering” in order to secure the votes necessary to obtain confirmation of the plan.  

I. Facts

In Lewis Brothers Bakeries, Inc. and Chicago Baking Co. v. Interstate Brands Corp. (2014 WL 2535294 (8th Cir. June 6, 2014)), the United States Court of Appeals for the Eighth Circuit, sitting en banc, held that a perpetual, royalty-free, assignable, transferable, exclusive trademark license granted in connection with a substantially consummated asset purchase agreement was not an executory contract that could be assumed or rejected by the licensor-debtor in bankruptcy.

The Fourth Circuit Court of Appeals recently ruled in the case of In re Construction Supervision Services that the property interest underlying a subcontractor’s lien on funds arises from the date it first furnishes labor or materials to a construction project.  The timing of when an interest in property arises is critical as it could allow, as it did here, a subcontractor to prime a lender’s perfected lien on accounts receivable when notice was not served until after the debtor filed bankruptcy.  This alert briefly describes the decision’s impact on the constru

A federal district court has ruled that a distressed debt fund is not a “financial institution” for purposes of the assignment provisions of a loan agreement.

Background