Both the Loan Syndications and Trading Association, Inc. (the “LSTA”) and the Loan Market Association (the “LMA”) publish the forms of documentation used by sophisticated financial entities involved in the trading of large corporate syndicated loans in the secondary trading market. The LSTA based in New York was founded in 1995. The LMA based in London was formed in 1996. Both the LSTA and LMA share the common aim of assisting in developing best practices and standard documentation to facilitate the growth and liquidity of efficient trading of syndicated corporate loans.

Despite the absence of any provision in the Bankruptcy Code expressly authorizing the recharacterization of a debt claim to an equity interest, it generally is well-established that recharacterization is within the broad powers afforded a bankruptcy court under section 105(a) of the Bankruptcy Code and is necessary for the proper application of the Bankruptcy Code’s priority scheme.1  In a recharacterization analysis, a

bankruptcy court ignores the labels of a transaction, examines the facts, and determines whether a

The Tenth Circuit Court of Appeals recently considered the question of how much protection is required for a secured creditor to be adequately protected. Banker’s Bank of Kansas, N.A. v. Bluejay Properties, LLC (In re Bluejay Properties, LLC), Bankr. No. 12-22680 (10th Cir. Mar. 12, 2014)(unpublished).

A recent appellate decision in the Western District of Washington prohibited hedge fund creditors from voting on a debtor’s chapter 11 plan on the basis that the funds did not qualify as “financial institutions” for purposes of the definition of “Eligible Assignee” under the applicable loan agreement.¹ While this counter-intuitive result seems driven by the specific facts of that case, this decision serves as a useful reminder of the importance of carefully reviewing assignment restrictions when purchasing loans in the secondary market.

The United States Court of Appeals for the Seventh Circuit (the “Seventh Circuit”) recently adopted a broad reading of the safe harbor of United States Bankruptcy Code (the “Bankruptcy Code”) § 546(e), which protects from avoidance “settlement payments” and transfers made in connection with a “securities contract,” among other transfers.1 In FCStone, the Seventh Circuit reversed the United States District Court for t

The French government has recently published a new regulation (ordonnance n°2014-326 dated March 12, 2014) amending France’s bankruptcy law. Its aim is to facilitate further restructurings of French companies, in particular with respect to pre-insolvency consensual restructurings, and to give creditors a greater say in the restructuring process.

PRE-INSOLVENCY CONSENSUAL RESTRUCTURINGS

Recently, two courts of appeal dismissed as moot under 11 U.S.C. § 363(m) appeals of orders   authorizing the sale of assets. The courts’ analysis focused on whether granting the appellant’s relief  from the lower courts’ order would affect the asset sale. Thus the trend in the appellate courts is that only appeals that will not affect the sale itself (such as a dispute over the distribution of sale proceeds) are not subject to being dismissed as moot.

Numerous bankruptcy trustees have attempted to claw back from colleges and universities — and even from private elementary and secondary schools — the tuition payments that parents made on behalf of their children, when the parents subsequently filed for bankruptcy.

Chapter 11 has long been used by companies to obtain relief from legacy tort liabilities. There has been a lingering question, however, as to whether chapter 11 can bar claims by tort litigants who were exposed to a hazardous material or defective product before bankruptcy but do not develop injuries until after the case is over. Some debtors have set up trusts and appointed representatives for so-called “future claimants”: this approach can be effective, but may add months or years to a bankruptcy case along with significant cost, business disruption and litigation.

On January 10, 2014, in a closely watched case, Judge George Hodges of the Bankruptcy Court for the Western District of North Carolina ruled that Garlock Sealing Technologies, Inc.