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Delaware Bankruptcy Court Finds that Section 546(e) Does Not Protect Fraudulent Transfers Following Supreme Court’s Ruling in Merit Management

The Bottom Line

In one of the first applications of the Supreme Court’s ruling on the scope of section 546(e) in Merit Management, Delaware Bankruptcy Court Judge Carey found that section 546(e)’s safe harbor did not apply to fraudulent transfers between two parties that were not financial institutions, even if the transaction passed through financial intermediaries.

What Happened

USA, Delaware, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, United States bankruptcy court
Highlights of 2018 Canadian Restructuring Law

While 2018 saw a slight decrease in nationwide CCAA filings (with 19 total cases commenced, compared to 23 in 2017), there were a number of important decisions rendered throughout the country. The highlights are summarized below:

Supreme Court of Canada clarifies Crown priority for GST claims

Canada, Company & Commercial, Insolvency & Restructuring, Litigation, Tax, McCarthy Tétrault LLP, Royal Bank of Canada, Bankruptcy and Insolvency Act 1985 (Canada), Canada Business Corporations Act 1985, Supreme Court of Canada
Insurance Rehabilitation Proceeding in Curaçao Recognized by New York Bankruptcy Court

The Bottom Line

In In re ENNIA Caribe Holding N.V., 18-12908 (Bankr. S.D.N.Y. Dec. 20, 2018), a bankruptcy court in the Southern District of New York recognized a foreign insurance company’s rehabilitation proceeding in Curaçao as a “foreign main proceeding,” pursuant to Chapter 15 of the Bankruptcy Code, over objections from the insurance company’s nondebtor parent company. In doing so, the court examined, among other things, what is required for a “collective proceeding” in a foreign insolvency.

What Happened

USA, New York, Insolvency & Restructuring, Litigation, Private Client & Offshore Services, Kramer Levin Naftalis & Frankel LLP, United States bankruptcy court, US District Court for the Southern District of New York
Third Circuit Upholds Right of Tenant to Continued Possession of Rejected Lease Premises and Reduced Rent Payable to Purchaser After Sale of Premises

The Bottom Line

USA, Delaware, Insolvency & Restructuring, Litigation, Real Estate, Kramer Levin Naftalis & Frankel LLP, Third Circuit
SDNY District Court Holds That Bankruptcy Courts Have Core Jurisdiction and Constitutional Adjudicatory Authority over Involuntary Third-Party Releases

The Bottom Line

USA, New York, Capital Markets, Corporate Finance/M&A, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Bankruptcy, Res judicata and issue estoppel, US District Court for the Southern District of New York
Supreme Court of Canada Rules in Favour of Lenders in Callidus

In a 2017 judgment discussed here, the Federal Court of Appeal permitted the CRA to assert a claim against a secured creditor who had received a repayment from its borrower prior to bankruptcy when the borrower also owed unremitted GST obligations to the Crown.

Canada, Insolvency & Restructuring, Litigation, Tax, McCarthy Tétrault LLP, Supreme Court of Canada, Federal Court of Appeal (Canada)
Fifth Circuit Holds Executory Contract Not Listed on Bankruptcy Schedules Is Automatically Rejected Upon Expiration of 60-Day Period in Chapter 7 and Not Capable of Being Sold

The Bottom Line

The Fifth Circuit recently held in RPD Holdings, L.L.C. v. Tech Pharmacy Services (In re Provider Meds, L.L.C.), No. 17-1113 (5th Cir. Oct. 29, 2018), that a patent license that was not specifically listed on the debtors’ bankruptcy schedules was automatically deemed rejected where it was not assumed within 60 days of the cases’ conversion from Chapter 11 to Chapter 7.

What Happened?

USA, Texas, Insolvency & Restructuring, Litigation, Patents, Kramer Levin Naftalis & Frankel LLP, Bankruptcy, Fifth Circuit
Third Circuit Remands W.R. Grace Decision Concerning Plan Channeling Injunction and Insurance Providers, Providing Additional Insights for Third Parties and Claimants

The Bottom Line

USA, Insolvency & Restructuring, Insurance, Litigation, Kramer Levin Naftalis & Frankel LLP, Third Circuit
Horizontal Gifting Upheld in Chapter 11 Plan in the Third Circuit

The Bottom Line

USA, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP
Fourth Circuit Upholds Requirement That Appellant Have an Economic Stake in Outcome of Appeal to Be a ‘Person Aggrieved’ and Boots Moot Appeal Too

The Bottom Line

USA, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Fourth Circuit