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Use of Accounting Term of Art in Arbitration Provision of Asset Purchase Agreement Narrows its Scope in Favor of Bankruptcy Court Jurisdiction Over Post-Closing Dispute

The Bottom Line

The Delaware District Court affirmed the bankruptcy court’s decision that the combination of a narrow arbitration provision and the bankruptcy court’s reservation of jurisdiction warranted denial of a motion to compel arbitration. The specific language of the arbitration provision, combined with the use of an accounting term of art, narrowed the scope of the arbitration provision sufficiently to rebut the presumption of arbitration under the Federal Arbitration Act.

What Happened?

USA, Delaware, Arbitration & ADR, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Federal Arbitration Act 1926 (USA)
Hospital Sales: No State Approval Required for Non-Operating Debtor

The Bottom Line

USA, California, Healthcare & Life Sciences, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP
Edmondson v. Gordon (In re Gordon)

(6th Cir. B.A.P. May 18, 2017)

USA, Insolvency & Restructuring, Litigation, Stoll Keenon Ogden PLLC, Sixth Circuit
Kendrick v. Rister (In re Rister)

(Bankr. E.D. Ky. May 18, 2017)

USA, Kentucky, Insolvency & Restructuring, Litigation, Stoll Keenon Ogden PLLC
Midland Funding, LLC v. Johnson

(U.S. Sup. Ct. May 15, 2017)

USA, Insolvency & Restructuring, Litigation, Stoll Keenon Ogden PLLC, Supreme Court of the United States
Second Circuit: Reclassification of Claim as Equity Interest? Not Unless It Is Duplicative

The Bottom Line

USA, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP, Second Circuit, Ninth Circuit
Stroud v. Parker (In re Parker)

(Bankr. W.D. Ky. May 12, 2017)

The bankruptcy court enters summary judgment against the debtor holding the debt nondischargeable pursuant to 11 U.S.C. § 523(a)(4). The plaintiffs inherited a judgment against the debtor that was based on the debtor’s theft of the decedent’s property. The plaintiffs were the proper parties to bring the claim, as the decedent’s estate assigned the judgment to them, and the requirements of § 523(a)(4) were satisfied. Opinion below.

Judge: Lloyd

Attorneys for Plaintiffs: Crain – Schuette Attorneys, Amanda Lisenby Blakeman

USA, Kentucky, Insolvency & Restructuring, Litigation, Stoll Keenon Ogden PLLC
In re Lutz - A Value’d Decision Under Section 363(f)(3)

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).

USA, New Jersey, Insolvency & Restructuring, Litigation, Kramer Levin Naftalis & Frankel LLP
Nicholson v. Hyundai Capital America, Inc.

(W.D. Ky. May 2, 2017)

USA, Insolvency & Restructuring, Litigation, Stoll Keenon Ogden PLLC
Town Center Flats, LLC v. ECP Commercial II LLC (In re Town Center Flats, LLC)

(6th Cir. May 2, 2017)

The Sixth Circuit reverses the bankruptcy court, finding that the assignment of rents acted as a complete transfer of ownership and the assignor did not retain any interest in the rents. The court analyzes Michigan law on such assignments and concludes that because the debtor/assignor had no rights in the rents assigned, they were not property of the bankruptcy estate. Opinion below.

Judge: Stranch

Attorney for Appellant: Robert N. Bassel

Attorney for Appellee: Jeremy S. Friedberg

USA, Insolvency & Restructuring, Litigation, Stoll Keenon Ogden PLLC, Sixth Circuit