The Bottom Line

The Bottom Line

The Bottom Line

The Bankruptcy Court for the District of New Jersey denied the Debtors’ request for approval of a sale of property free and clear of liens encumbering the property. The court determined that the term “value” in section 363(f)(3) of the Bankruptcy Code referred to the face value of all liens on the property and not the “economic value”. Because the value of liens encumbering the property in this case exceeded the proposed sale price, the property could not be sold free and clear of all liens pursuant to section 363(f)(3).

The Bottom Line

In a recent ruling, Trusa v. Nepo(Del. Ch. April 13, 2017), consistent with prior case law, Vice Chancellor Montgomery-Reeves of the Delaware Chancery Court held that a creditor cannot bring a derivative action against a Delaware limited liability company, even where the company is clearly insolvent. The ruling is interesting, because in the well-known case of North American Catholic Educational Programming Foundation, Inc. v. Gheewalla, 930 A.2d 92 (Del.

In a short decision, In re that Certain Indenture Date as of April 1, 2010 (MN Ct. App. April 3, 2017), the Court of Appeals of Minnesota recently addressed a challenge to the award of trustee fees and legal expenses brought by a municipal bondholder.

In two recent decisions, both the United States Courts of Appeals for the Fourth Circuit (Fourth Circuit) and the Fifth Circuit (Fifth Circuit) concluded that certain orders entered in bankruptcy cases could not be grounds for invocation of res judicata with regard to proofs of claim that are deemed allowed. Both addressed the plain language of Section 502(a) of the United States Bankruptcy Code (the Code) in conjunction with relevant Bankruptcy Rules and Official Forms, and congressional intent.

On March 9, 2017, a bankruptcy court in New York became the latest to weigh in on the developing circuit court split regarding whether modification of mortgages should be permitted under 11 U.S.C.

Part 1 of this series described the recent decision of the ISDA Americas Determinations Committee to declare that a “failure to pay” had occurred with respect to iHeartCommunications Inc., notwithstanding that the only non-payment had been to a wholly owned subsidiary. The non-payment was orchestrated to avoid a springing lien that would have been triggered had all the notes of a particular issue of iHeartCommunications debt been paid in full. It did not reflect on the creditworthiness of iHeartCommunications.

A recent decision by the U.S. District Court for the Southern District of New York in Cumulus Media Holdings Inc. v. JP Morgan Chase Bank, N.A. (SDNY Feb. 24, 2017) found that a proposed refinancing that was consented to by the company’s revolving credit lenders nevertheless violated the negative covenants in the company’s Credit Agreement.

The Proceedings