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Newpage - a good old fashioned free-fall Chapter 11 case

Last week’s Chapter 11 filing by NewPage Corporation, a company with assets and liabilities in the billions of dollars, stands as a relative rarity in the current restructuring environment.

USA, Insolvency & Restructuring, Litigation, Kelley Drye & Warren LLP, Bankruptcy, Trade union, Hedge funds, Debt, Liability (financial accounting), Collective bargaining agreements, Balance sheet, Debtor in possession, Distressed securities, Bénéfice, US Environmental Protection Agency, Pension Benefit Guaranty Corporation
Not all bankruptcy “core” proceedings are created equal: a limitation on state law lender liability claims in bankruptcy court after Stern v. Marshall

The scenario has become all too familiar in recent years: a borrower defaults on a loan and, when the lender pursues the loan collateral through foreclosure or other proceedings, the borrower files for bankruptcy protection. More often than not, when the lender appears in bankruptcy court to pursue its interest in the collateral, the borrower counterattacks with a host of state law lender liability claims.

USA, Insolvency & Restructuring, Litigation, Katten Muchin Rosenman LLP, Bankruptcy, Debtor, Collateral (finance), Interest, Tortious interference, Foreclosure, Default (finance), US Congress, Title 11 of the US Code, US Constitution, Supreme Court of the United States, United States bankruptcy court
Creditors of insolvent limited liability companies cannot sue derivatively

The Supreme Court of Delaware recently held that creditors of insolvent Delaware limited liability companies (LLCs) lack standing to bring derivative suits on behalf of the LLCs.

In March 2010, CML V brought both derivative and direct claims against the present and former managers of JetDirect Aviation Holdings LLC in the Court of Chancery after JetDirect defaulted on its loan obligations to CML. The Vice Chancellor dismissed all the claims, finding that, as a creditor, CML lacked standing to bring derivative claims on behalf of JetDirect, and CML appealed.

USA, Delaware, Company & Commercial, Insolvency & Restructuring, Litigation, Katten Muchin Rosenman LLP, Statute of limitations, Limited liability company, Standing (law), Constitutionality, Involuntary dismissal, Default (finance), Supreme Court of the United States, Court of Chancery, Delaware Supreme Court, Court of equity
Mets' owners swing for the fences against Madoff trustee

Fred Wilpon, Saul Katz, and their families and affiliated enterprises (the “Wilpon/Katz Group”) last week formally requested the dismissal of the adversary proceeding commenced by Irving Picard, the trustee of Bernard L. Madoff Investment Securities LLC (“BLMIS”). In a two hour hearing before U.S.

USA, Insolvency & Restructuring, Litigation, White Collar Crime, Kelley Drye & Warren LLP, Bankruptcy, Debtor, Fraud, Discovery, Debt, Mediation, Good faith, Title 11 of the US Code, Trustee, Second Circuit
Second Circuit affirms Madoff trustee's net equity calculation

The United States Court of Appeals for the Second Circuit found in favor of the trustee (the Trustee) presiding over the liquidation of Bernard L. Madoff Investment Securities (BMIS), affirming the Trustee’s calculation of “net equity” in the BMIS liquidation. The Trustee calculates net equity to determine the value of claims submitted by victims of Madoff’s massive fraud.

USA, Capital Markets, Insolvency & Restructuring, Litigation, White Collar Crime, Katten Muchin Rosenman LLP, Security (finance), Fraud, Limited liability company, Liquidation, Market value, Trustee, Second Circuit
Seventh Circuit dodges intra- and inter-circuit conflict regarding res judicata and bankruptcy

MATRIX IV, INC. v. AMERICAN NATIONAL BANK AND TRUST CO. OF CHICAGO (July 28, 2011)

USA, Insolvency & Restructuring, Litigation, Kelley Drye & Warren LLP, Bankruptcy, Breach of contract, Fraud, Res judicata and issue estoppel, Estoppel, Summary offence, Common law, Collateral estoppel, Collusion, Racketeer Influenced and Corrupt Organizations Act 1970 (RICO) (USA), United States bankruptcy court, Seventh Circuit
Creditor fraud in bankruptcy proceeding is not a "fraud on the court" for Rule 60 purposes

IN RE: GOLF 255, INC. (July 22, 2011)

USA, Insolvency & Restructuring, Litigation, Kelley Drye & Warren LLP, Bribery, Bankruptcy, Shareholder, Fraud, Discovery, Res judicata and issue estoppel, Mediation, Indian National Congress, Trustee, United States bankruptcy court, Seventh Circuit
Remand order is not appealable when lower court unmistakenly dismissed for lack of jurisdiction, even though erroneously

TOWNSQUARE MEDIA v. BRILL (July 21, 2011)

USA, Insolvency & Restructuring, Litigation, Media & Entertainment, Kelley Drye & Warren LLP, Bankruptcy, Summary offence, Remand (court procedure), Non-disclosure agreement, Subject-matter jurisdiction, Supplemental jurisdiction, United States bankruptcy court, Seventh Circuit
So this is why judges bother to write dissenting opinions - Seventh Circuit decision on credit bidding vindicates Judge Ambro's Philadelphia Newspapers dissent

Critics of last year’s decision on credit bidding by the Third Circuit Court of Appeals in the Philadelphia Newspapers chapter 11 case welcomed the Seventh Circuit’s recent unanimous opinion in River Road Hotel Partners LLC.

USA, Insolvency & Restructuring, Litigation, Kelley Drye & Warren LLP, Credit (finance), Debtor, Collateral (finance), Debt, Dissenting opinion, Secured loan, US Congress, United States bankruptcy court, Third Circuit, Seventh Circuit, US District Court for Northern District of Illinois
Collection of utility charges does not fit within automatic stay exceptions

REEDSBURG UTILITY COMMISSION v. GREDE FOUNDRIES (July 13, 2011)

USA, Wisconsin, Energy & Natural Resources, Insolvency & Restructuring, Litigation, Kelley Drye & Warren LLP, Bankruptcy, Property tax, Interest, Contempt of court, United States bankruptcy court