Background: Grupo OAS, a Brazilian construction conglomerate linked to a massive corruption scandal (“OAS”), filed for Chapter 15 creditor protection in the Bankruptcy Court for the Southern District of New York on April 15, 2015, two weeks after entering bankruptcy in Brazil. If “recognized” by Bankruptcy Judge Stuart Bernstein, the Chapter 15 petition would, among other things, essentially bind OAS creditors in the United States to the restructuring terms approved by the Brazilian court overseeing OAS’s reorganization.
On March 16, 2015, the Spanish subsidiary of Banca Privada d’Andorra, Banco de Madrid, sought bankruptcy protection in the midst of a run on the bank by depositors. The run and bankruptcy were the result of FinCEN’s March 10, 2015, announcement that it would bar U.S. banks from providing correspondent banking services to Banca Privada d’Andorra or any bank that processes transactions for Banca Privada d’Andorra.
On March 12, 2015, the United States Court of Appeals for the Eleventh Circuit affirmed the authority of a bankruptcy court to issue non-consensual, non-debtor releases in connection with the confirmation of a plan of reorganization.1 With this decision, the Eleventh Circuit joined the majority view that such releases are permissible under certain circumstances.
Background
On January 21, 2015, the United States Court of Appeals for the Second Circuit entered an opinion holding that an authorized UCC-3 termination statement is effective, for purposes of Delaware’s Uniform Commercial Code (the “UCC”), to terminate the perfection of the underlying security interest even though the secured lender never intended to extinguish the security interest and mistakenly authorized the filing.1
Background
On October 17, 2014, the Delaware Supreme Court entered an opinion holding that a UCC-3 termination statement that is authorized by the secured party is effective to terminate the original UCC filing even though the secured party did not actually intend to extinguish the underlying security interest.1 Because the court determined that the relevant section of Delaware’s Uniform Commercial Code (the “UCC”) is unambiguous and
On October 16, 2014, the United States Court of Appeals for the Fifth Circuit entered an order requiring a real estate lender, First National Bank (the “Lender”), to refund certain mortgage payments it received from Protective Health Management (the “Debtor”), an affiliate of its borrower.1 Because the mortgage payments constituted actual fraudulent transfers, the Fifth Circuit held that the Lender could retain the payments only to the extent of the value of the Debtor’s continued use of the property.2&
Another bankruptcy court—this time in New York—has weighed in on the issue of whether “make whole” provisions are enforceable in bankruptcy. See In re MPM Silicones, LLC, et al. (a/k/a Momentive Performance Materials).
As the wave of litigation spawned by the 2008 financial crisis begins to ebb, insurance-coverage litigation arising out of the credit crisis continues unabated. Financial institutions have successfully pursued insurance coverage for many credit-crisis claims under directors and officers (D&O) and errors and omissions (E&O) policies that they purchased to protect themselves against wrongful-act claims brought by their customers, but in response, some insurers continue to raise inapplicable exclusions in an attempt to diminish or limit coverage for their policyholders.
One deliberately ironic facet of the 2004 film Howard Hughes bio-pic The Aviator (the one with Leonardo DiCaprio) is the fact that the airlines fighting for world dominance in the 1940s were Howard Hughes’ TWA and Juan Trippe’s Pan Am. By the time of the movie, of course, both famous airlines were gone. Pan Am’s final descent into bankruptcy court ended in 1991. Following its own troubles (and two bankruptcies in the 1990s), TWA was acquired by American Airlines in 2001. But does the death of an airline mean an end to litigation? Of course not.
The health of the healthcare industry can be summarized as follows: as go federal reimbursement rates, so goes the financial viability of healthcare providers, whether hospitals, nursing homes or medical practices.