This discussion is being provided to our clients and friends to analyze the challenges presented in this difficult economic environment when an FDICinsured institution experiences a capital difficulty and is directed by the Banking Regulators1 to restore the institution's capital adequacy.2 In the past four years, the FDIC has closed approximately 400 insured institutions—as of January 1, 2012, the FDIC has indicated that there were over 800 banks on its "problem bank list." The difficulties experienced by many of these institutions are summarized in this analysis—
Bankruptcy Rule changes, effective December 1, 2011, require mortgage holders and servicers to include additional documentation supporting proofs of claim filed in individual debtor cases. Mortgage holders and servicers must follow these rules or face sanctions and potential loss of the right to present the omitted documentation as evidence in subsequent proceedings.
On January 19, 2012, the Seventh Circuit in In re River East Plaza, LLC, (No. 11-3263), held in favor of a secured lender further strengthening the rights of secured creditors in bankruptcy cases.
Numerous municipalities in California and elsewhere are struggling financially. Indeed, Harrisburg, Pennsylvania and Central Falls, Rhode Island have both recently filed for Chapter 9 protection. State governments may have neither the economic reserves nor the political will to bail out troubled cities and counties. These circumstances have raised the focus on Chapter 9 as a tool for reorganizing municipality debt obligations and has deepened the debate between states and their municipalities about the best strategies for addressing a fiscal crisis.
Recent remarks by the English High Court in the insolvency case Green (Liquidator of Stealth Construction Limited) -v- Ireland [2011] EWHC 1305 (Ch) suggest that in some circumstances, and at least in the context of fast-moving real property transactions, an exchange of emails may well satisfy the requisite formalities for creation of a binding and enforceable contract.
On September 6, 2011, a bankruptcy court approved an agreement between bankrupt bookseller Borders Group, Inc. (“Borders”) and Next Jump, Inc., (“Next Jump”) regarding Next Jump’s alleged trademark infringement and unauthorized use of Borders’ customer information. Next Jump stipulated that it will not communicate with persons on Borders’ customer list, and that it would remove the Borders name and marks from websites that Next Jump owns or operates.
The Second Circuit Court of Appeals Protects Payments Made by Enron to Redeem Commercial Paper Prior to Maturity as “Settlement Payments" Under the Bankruptcy Code's Safe Harbor Provisions.
Tribal economies are not immune to the recent global financial crisis and economic downturn. The Indian gaming industry was hit especially hard. After consistent year-over-year growth in tribal gaming revenues during the 1990s and continuing through 2008, industry revenues declined in 2009 and have continued to stagnate. Amid reports of several tribal casino defaults—and many more tribes with significant debt maturing in the near future that will need to be restructured—tribes and creditors must consider two questions: Are tribes and their corporations eligible for bankruptcy?
In a recent 113-page decision, Judge Alan S. Gold of the U.S. District Court for the Southern District of Florida quashed the TOUSA Bankruptcy Court’s previous controversial fraudulent conveyance decision that required secured lenders (the "Transeastern Lenders") to disgorge approximately $480 million received in settlement of their claims against TOUSA.
On October 21, 2010, the New York Court of Appeals ruled on certified questions in two cases: Kirschner v. KPMG LLP ("Kirschner"), certified by the United States Court of Appeals for the Second Circuit, and Teachers' Retirement System of Louisiana v. PricewaterhouseCoopers LLP ("Teachers' Retirement"), certified by the Delaware Supreme Court, reiterating and strengthening the in pari delicto defense.