As many of you know, on December 19, 2011, Saab Automobile AB and affiliated companies filed for bankruptcy in Sweden. The company issued a bulletin to its dealers that same day, announcing that it immediately suspended processing and payment of all claims, and it is suspending warranty coverage on all new Saab vehicles. What does this mean for dealers? Every dealer’s situation is different, and each dealer will have to evaluate its own circumstances based on consultation with an attorney.

• On December 20, 2011, the South Carolina Public Service Commission (SC PSC) issued a scheduling order for AT&T South Carolina’s complaint against Halo Wireless. AT&T alleges that Halo, which filed for bankruptcy protection after AT&T initiated this action and similar complaints in several other states, was sending AT&T landline-originated traffic but refused to pay terminating access charges. AT&T also alleges that Halo has been manipulating call signaling information to hide the traffic’s true origin and to make it appear as wireless-originated traffic.

The United States Bankruptcy Court for the Southern District of New York issued a memorandum decision in the Lehman Brothers Inc. (LBI) liquidation proceeding confirming the LBI trustee’s determination that certain claims relating to TBA contracts do not qualify as customer claims against LBI’s estate.

The McCaskill-Bond Amendment to the Federal Aviation Act provides that a merger of air carriers requires the new entity to merge the seniority lists of the two carriers’ employees. Republic Airways acquired Midwest Airlines, and thereafter the Teamsters Union, which represented the flight attendants at Republic’s older carriers, refused to integrate the seniority lists for flight attendants and placed Midwest’s flight attendants at the bottom of the seniority roster. A group of Midwest flight attendants challenged the action, asserting that it violated the amendment.

On November 25, a notice of proposed rulemaking was published jointly by the Federal Deposit Insurance Corporation (the FDIC) and the Departmental Offices of the Department of the Treasury (the Treasury, and collectively, the Agencies) to implement applicable provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). In accordance with the requirements of the Dodd-Frank Act, the proposed rules govern the calculation of the maximum obligation limitation (MOL), as specified in section 210(n)(6) of the Dodd-Frank Act.

• On October 12, 2011, the Bankruptcy Court for the Southern District of New York brought TerreStar Network’s Chapter 11 bankruptcy proceeding one step closer to conclusion by approving the debtor’s $98 million settlement with two separate creditor groups over a certain purchase money credit agreement.

The United States Bankruptcy Court for the Southern District of New York (the Court), has held that section 553(a) of the Bankruptcy Code prohibits a swap counterparty from setting off amounts owed to the debtor against amounts owed by the debtor to affiliates of the counterparty, notwithstanding the safe harbor provision in section 561 of the Bankruptcy Code and language in the ISDA Master Agreement permitting the swap counterparty to effect “triangular” setoffs. In re Lehman Brothers Inc., Case No. 08-01420 (JMP)(SIPA) (Bankr. S.D.N.Y. October 4, 2011).

The House Judiciary Committee recently heard testimony on the benefits and pitfalls of proposed legislation that would change bankruptcy venue rules by imposing limitations on where corporations may file for bankruptcy protection. The hearing came in the wake of a statement by Judiciary Committee Chairman Lamar Smith, R-Texas, in which he asked how Enron had been able to file its bankruptcy case in Manhattan considering that Enron was based in, and had substantially all of its assets and operations in, Texas.

In re Zais Investment Grade Ltd. VII1 is the latest in a recent line of bankruptcy cases challenging bedrock assumptions regarding securitization special purpose entities (SPEs) and bankruptcy considerations in securitization transactions.2 Zais establishes precedent allowing a senior noteholder of a collateralized debt obligation (CDO) to place the CDO issuer in an involuntary chapter 11 bankruptcy in order to advance an asset management plan that would otherwise require supermajority approval of all noteholders (including all junior classes) under the related indenture.

• On September 16, 2011, the U.S. Department of Justice amended its complaint to enjoin the AT&T/T-Mobile merger to include the states of New York, California, Illinois, Pennsylvania, Massachusetts, Washington, and Ohio as additional plaintiffs. United States v. AT&T Inc., No. 11-cv-1560 (D.D.C.).
• On September 19, 2011, the United Stated District Court for the Northern District of Texas largely denied the motion to dismiss of Verizon Communications, and related entities, against claims that they defrauded investors and creditors via spinoff company Idearc.