The U.S. Supreme Court issued a unanimous decision on May 29, 2012, finding that a chapter 11 bankruptcy plan of liquidation is not confirmable over a secured lender’s objection if such plan prohibits the lender from credit bidding at a sale of its collateral.1 See RadLAX Gateway Hotel, LLC et al. v. Amalgamated Bank, No. 11-166, 566 U.S. ___ (2012).
On May 14, 2012, the Third Circuit Court of Appeals in In re Heritage Highgate, Inc., et al., No. 11-1889 (3d Cir. May 14, 2012) clarified the burden of proof with respect to the valuation and ultimate allowance of alleged secured claims under Bankruptcy Code section 506(a).
In Senior Transeastern Lenders v. Official Committee of Unsecured Creditors (In re TOUSA, Inc.), the Eleventh Circuit Court of Appeals reinstated the decision of the United States Bankruptcy Court for the Southern District of Florida (the “Bankruptcy Court”) in which the Bankruptcy Court avoided the liens given by TOUSA’s subsidiaries to new lenders and permitted the recovery of the proceeds of the new loan from other TOUSA lenders that had taken the funds in repayment of their TOUSA guaranteed loans.
Relying on the U.S. Supreme Court’s decision inAT&T Mobility LLC v. Concepcion, the Ninth Circuit Court of Appeals recently held that California’s rule against compulsory arbitration of claims for public injunctive relief was preempted by the Federal Arbitration Act (“FAA”). The Court also underscored the key points of an enforceable arbitration clause. Kilgore v. KeyBank (March 7, 2012).
Case Background
In the recent matter Wilmington Trust Natl. Assn. v. Vitro Automotriz, Index No. 652303/11 (N.Y. Sup. Dec. 5, 2011), Justice Bernard J. Fried of the Commercial Division addressed the obligations of guarantors of indentured notes. Regardless that the issuer of the notes had declared bankruptcy in Mexico, the guarantors, none of whom were co-debtors, were not relieved of their obligations under the notes.
In Wells Fargo Bank Northwest v. US Airways, Inc., 2011 NY Slip Op 52188(U) (Sup. Ct. N.Y. County Dec. 1, 2011), Justice Bernard J. Fried held that a liquidated damages provision requiring payment of a holdover fee equal to twice the monthly rent was reasonable and did not function as a penalty under New York contract law. The case arose from three aircraft sale and leaseback transactions, pursuant to which Defendant US Airways, Inc. (“US Airways”), sold to Plaintiff Wells Fargo Bank Northwest (“Wells Fargo”), and Wells Fargo leased back to US Airways, three Boeing 737 aircraft.
In the most recent ruling in long-running litigation styled AMG National Trust Bank v. Ries, NO. 06-CV4337, 09-cv-3061 (E.D. Pa.) (decided Dec.
Responsive to issues faced with difficulty in obtaining financing by businesses (particularly small- to medium-size enterprises) due to the global financial crisis, State Administration of Industry and Commence officially released Administrative Measures for Corporate Debt-for-Equity Swap Registration (the “Measures”) recently, which formalizes regulation of debt-for-equity swap on the national level. The Measures will be put into implementation on January 1, 2012.
Once triggered by a debtor's bankruptcy petition, the automatic stay suspends a parties' right to commence or continue an action against property of the debtor’s estate. In general, a party can seek relief from the automatic stay for a variety of reasons, including for cause, lack of adequate protection or that the debtor has no equity in the property and the property is not necessary for reorganization. In a case of first impression, a district court in Pennsylvania has found that an injunction enforcing a non-compete provision in a franchise agreement was not a "claim" against t
The House Judiciary Committee recently held a hearing to consider an amendment to the venue provisions of the Bankruptcy Code proposed by the Committee’s Chairman that would require corporations to file voluntary chapter 11 petitions in the district where they maintain their principal place of business or have their principal assets. Under the current bankruptcy venue provisions of the U.S. Code, a debtor corporation can file its bankruptcy case in the state where it is incorporated, where it has its principal assets, or where it is headquartered.