The US Court of Appeals for the Ninth Circuit recently held that a creditor of a bankrupt corporation may assert alter ego claims against the corporation’s sole shareholders. The California Court of Appeals for the Second Appellate District not only supports the Ninth Circuit’s decision but has recently taken it one step further, holding that alter ego allegations are not even subject to the automatic bankruptcy stay.

Can a debtor seeking debtor-in-possession (“DIP”) financing under Section 364 of the Bankruptcy Code grant a lender a lien on a leasehold interest in the face of an express anti-hypothecation provision in the underlying lease?

The Second Circuit Court of Appeals issued a summary order this week upholding the aggressively unfavorable treatment of a senior secured creditor under the reorganization plan (the “Plan”) of DBSD North America, f/k/a ICO North America (“DBSD”).

Reclamation claimants have long enjoyed special protections under Bankruptcy Code section 546(c), which recognizes that “the rights and powers of a trustee... are subject to the right of a seller of goods,” including reclamation rights under Section 2-702 of the Uniform Commercial Code. At a minimum, Section 2-702 clearly requires that a reclamation claimant must make demand upon its buyer in order to reclaim its goods and protect its rights. However, Paramount Home Entertainment Inc. v. Circuit City Stores, Inc., 2010 WL 3522089 (ED Va., Sept.

Some legal commentators have lamented the extent to which lenders have been able to use debtor in possession (“DIP”) financing arrangements to gain control over an entire Chapter 11 case.

Bankruptcy lawyers who are regularly involved in distressed m&a deals have been wondering for the past few months about the potential fallout from Philadelphia Newspapers.

REDMOND v. FIFTH THIRD BANK (October 20, 2010)

COSTELLO v. GRUNDON (October 18, 2010)

IN RE: RESOURCE TECHNOLOGY CORP. (October 1, 2010)

The chapter 11 case of DBSD North America, Inc. (“DBSD”), f/k/a ICO North America, has been marked by aggressive tactics and extreme positions from its commencement. DBSD, a non-operating satellite communications company, and its second lien noteholders made clear their intent to cram down a plan of reorganization (the “Plan”) on DBSD’s first lien lenders.