© 2015 Hunton & Williams LLP 1 May 2015 Oak Rock Financial District Court Addresses the Applicable Legal Standard for True Participation Agreements The United States District Court for the Eastern District of New York recently applied two tests, the True Participation Test and the Disguised Loan Test, to determine whether agreements were true participation agreements or disguised loans.1 In addition, the District Court noted that the most important question in such a determination is the risk of loss allocation in the transaction, and that if an alleged participant is not subject to the

In Quadrant Structured Products Company, Ltd. v. Vertin, the Delaware Court of Chancery made two key rulings concerning the rights of creditors to bring derivative lawsuits against corporate directors.¹  First,  the court held that there is no continuous insolvency requirement during the pendency of the lawsuit.

In two recent cases, the United States District Court for the Southern District of New York has indicated that Section 316(b) of Trust Indenture Act of 19391 (the “TIA”) requires unanimous consent for out-of- court restructurings that impair bondholders’ practical ability to receive payments, even if the bondholders’ technical, legal ability to receive payments remains intact.

Following the Eleventh Circuit’s decision last year in Crawford v. LVNV Funding, LLC, the filing of a proof of claim on a time-barred debt in a bankruptcy case pending in the Eleventh Circuit’s jurisdiction violates the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-1692p (“FDCPA”). But as the U.S. Bankruptcy Court for the Northern District of Alabama recently made clear in Gurganus v. Recovery Management Systems Corp. (In re Gurganus), No. 7:14-ap-70054-BGC, 2015 WL 65089 (Bankr. N.D. Ala. Jan.

INTRODUCTION

The Supreme Court has agreed to hear Bullard v. Hyde Park Savings Bank (In re Bullard), U.S., No. 14-116 (cert. granted 12/12/14). The Court's decision in this case will resolve a circuit split with regard to whether an order denying confirmation of a bankruptcy plan is a final order appealable pursuant to 28 U.S.C. § 158(d)(1). The decision has the potential to impact Chapter 13 and Chapter 11 cases.

The United States Court of Appeals for the Fifth Circuit recently entered an order confirming that when a fraudulent transfer defendant is able to establish a defense pursuant to 11 U.S.C.

On November 5, 2014, the United States Bankruptcy Court for the Western District of Virginia issued a noteworthy opinion that runs counter to what many Virginia law practitioners assume to be the common law in Virginia – i.e., that a manager of a Virginia limited liability company owes a fiduciary duty of loyalty to the limited liability company.

Section 1322(c)(1) of the Bankruptcy Code1 allows debtors to cure defaults and reinstate a 
mortgage on their principal residence "until such residence is sold at a foreclosure sale that is 
conducted in accordance with applicable nonbankruptcy law."2
 Like many provisions of the 
Bankruptcy Code, this one appears fairly straightforward at first glance; a debtor has the right to 
cure and reinstate a home mortgage until the property is sold at a foreclosure sale. 

The United States District Court for the District of Delaware recently entered a Memorandum Opinion (the “District Court Opinion”) concerning the constitutional sufficiency of the publication of the bar date notice in the New Century bankruptcy as it applies to unknown creditors.1 The District Court vacated the Bankruptcy Court’s August 30, 2013,order (the “Constructive Notice Order”), which had approved the constitutional sufficiency of notice to unknown creditors by publication in The Wall Street Journal and the Orange County Register.

Who Will Think of the Tenants: Split in Authority Regarding the Interplay Between Bankruptcy Code Sections 363(f) and 365(h)(1)(A)