It is no surprise to anyone in the business of secured lending that valuation matters. It is worth noting, however, that collateral valuation may be outcome-determinative in litigation over a plan of reorganization in bankruptcy. Although valuation was not the central focus of the Fifth Circuit’s recent decision in Western Real Estate Equities, L.L.C. v. Village at Camp Bowie I, L.P. (Matter of Village at Camp Bowie I, L.P.), No. 12-10271, 2013 U.S. App. LEXIS 3949 (5th Cir. Feb.
Recently, an NLRB administrative law judge ruled that two policies maintained by subsidiaries of the University of Pittsburgh Medical Center (“UPMC”) violated Section 8(a)(1) of the National Labor Relations Act. See UPMC, Case No. 6-CA-81896, 4/19/13. Specifically, ALJ David Goldman found that the hospitals’ electronic mail and messaging and acceptable use of information technology resources policies impermissibly interfered with employees’ Section 7 right to engage in protected concerted activity.
The Take-Away
Missing the limitations period for bringing a court action to recover a debt does not extinguish other legal rights and remedies in respect of that debt, such as bringing an application for bankruptcy or proving a claim in a bankruptcy estate.
The Case
Under Section 436 of the Internal Revenue Code, a single employer defined benefit plan sponsored by a company in bankruptcy cannot pay any “prohibited payments” (e.g., lump sums, Social Security level income annuity payments) if the plan is less than 100% funded. In June 2012, the IRS issued proposed regulations permitting such a defined benefit plan to be amended to eliminate prohibited payment forms without violating the anti-cutback requirements of Internal Revenue Code Section 411(d)(6) if certain conditions are satisfied.
In the recent decision of Frank v. Farlie, Turner & Co., LLC, 2011 ONSC 5519, Mr. Justice Perell of the Ontario Superior Court of Justice found, among other things, that punitive damages are not available under Part XXIII.1 of the Ontario Securities Act as such damages are inconsistent with the scheme and purpose of Ontario’s statutory secondary market disclosure liability regime. In so doing, the court confirmed the fundamental importance of liability limits in continuous disclosure claims against directors and officers.
- Leases Over One Year Must be Registered in all Provinces Except Québec
In recent years the Ontario Personal Property Security Act (“PPSA”) changed the scope of its application to include all leases for a term of more than one year, regardless of whether it is a “true” or “financing” lease. This is a different rule than exists in the United States and one often missed on cross border transactions.
On July 25, 2012, the Third Circuit issued its decision in In re American Capital Equipment LLC and Skinner Engine Co., 688 F.3d 145 (3rd Cir. 2012), becoming the first circuit court to align itself with numerous district courts that have allowed bankruptcy courts to reject a Chapter 11 plan prior to a confirmation hearing.
On July 9, 2012, the U.S. Court of Appeals for the Seventh Circuit issued its decision in Sunbeam Products, Inc. v. Chicago American Manufacturing, LLC (“Sunbeam”). It is a landmark opinion for trademark licensees whose licenses are rejected in bankruptcy by trademark owners.
Cinram International Income Fund (TSX: CRW.UN), a Canadian company that is one of the world’s largest providers of multi-media products, has sought and obtained protection under the Companies' Creditors Arrangement Act (CCAA). The company proposes to sell its assets and businesses in the United States, Canada, the United Kingdom, France and Germany to Najafi Companies.
Cinram International Income Fund (TSX: CRW.UN), a Canadian company that is one of the world’s largest providers of multi-media products, has agreed to sell virtually all of its assets and businesses in the United States, Canada, the United Kingdom, France and Germany to Najafi Companies after obtaining creditor protection under the Companies' Creditors Arrangement Act (CCAA).