On a matter of first impression, the Fourth Circuit issued an opinion in the Derivium Capital, LLC bankruptcy case on May 24, 2013,1 affirming the District Court’s ruling that Grayson Consulting Inc. ("Grayson"), the chapter 7 Trustee’s assignee, could not avoid as fraudulent conveyances Wachovia’s2 commissions, fees, and margin interest payments because those payments were protected from recovery by the safe harbor of United States Bankruptcy Code (the "Bankruptcy Code") section 546(e).

On April 16, 2013, the United States Court of Appeals for the Second Circuit (the "Second Circuit") issued its decision in In re Fairfield Sentry Ltd.,¹ in which the court held that (1) the relevant time for analyzing a debtor’s center of main interest ("COMI") for purposes of recognizing a foreign proceeding is at or around the time a petition for recognition is filed; (2) the determination of COMI is dependent on the facts of each case, which may include insolvency proceedings in the foreign jurisdiction; and (3) the public policy exception to relief sough

On March 1, 2013, the Fifth Circuit Court of Appeals issued an opinion in Wells Fargo Bank N.A. v. Texas Grand Prairie Hotel Realty, L.L.C. et al, (Inre Texas Grand Prairie Hotel Realty, L.L.C.)¹ (“Texas Grand Prairie”) affirming an order of the bankruptcy court confirming a debtor’s plan of reorganization over the objection the secured creditor that argued that the interest rate proposed by the plan to be paid to the secured creditor was too low in violation of 11 U.S.C. §1129(b).

On February 26, 2013, the Fifth Circuit Court of Appeals issued an opinion in Western Real Estate Equities, L.L.C. v. Village at Camp Bowie I, L.P.¹ (“Camp Bowie”). The bankruptcy court confirmed a debtor’s plan of reorganization over the objection of the secured creditor that argued the impaired accepting class of the cramdown plan was “artificially” impaired and that the plan was not proposed in good faith.

On February 14, 2013, the United States Court of Appeals for the Seventh Circuit in In re Castleton Plaza, LP,¹ became the first court of appeals to consider whether a competitive auction is required when a debtor’s plan of reorganization provides an “insider” that does not hold an equity interest in the debtor with an exclusive option to purchase equity in exchange for new value since the Supreme Court’s landmark decision in 203 N. LaSalle² more than a decade ago.

On January 17, 2013, the United States Bankruptcy Appellate Panel for the First Circuit (the “First Circuit BAP”) rendered its opinion in Massachusetts Department of Unemployment Assistance v. OPK Biotech, LLC (In re PBBPC, Inc.), BAP No. MB 12-042 (B.A.P. 1st Cir. Jan.

A problem frequently faced by landlords in the current economic climate is that of tenants who time their entry into administration so that it takes place just after rent payable in advance on a quarter day has fallen due. This growing practice has left landlords frustrated and out of pocket.

In our last issue, we looked at the implications for out-of-court administrations where the company or directors seek to appoint an administrator under paragraph 22 of Schedule B1 to the Insolvency Act 1986, but then discover that between filing their notice of intention to appoint and their notice of appointment, a winding-up petition has been presented, triggering paragraph 25 of the Schedule. Paragraph 25 prevents the appointment of an administrator under paragraph 22 where there is a pending winding-up petition.

The Second

On August 2, 2012, the United States Court of Appeals for the Fifth Circuit issued its decision in Lightfoot v. MXEnergy Elec., Inc. (In re MBS Mgmt. Servs., Inc.), Case No. 11-30553 (5th Cir. 2012), holding that a real estate management company’s electricity supply contract qualified as a “forward contract”, payments on account of which are protected from avoidance as preferential transfers under the Bankruptcy Code’s “safe harbor” provisions.