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?

Since 2003, the procedure for appointing administrators has largely consisted of filing simple forms with a court. What could be easier? A recent case has, however, highlighted the dangers of making errors in the filing process and serves as a timely warning to everyone involved in insolvency and security enforcement work.

In Kaupthing Capital Partners II Master LP Inc, the English courts ruled that an appointment of administrators was invalid as the incorrect form had been used for the appointment.

According to a recent judgment in the English High Court, Financial Support Directions ("FSDs") issued by the Pensions Regulator ("the Regulator") against companies in administration are to be treated as expenses of the administration. This means that they are to rank ahead of preferential and unsecured creditors and, indeed, perhaps ahead of the remuneration of the administrators themselves.

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”).

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.