In RGH Liquidating Trust v. Deloitte & Touche, LLP, 2011 WL 2471542 (N.Y.
On Thursday, the Supreme Court in a 5-4 decision ruled in Stern v. Marshall[1] that the congressional grant of jurisdiction to bankruptcy courts to issue final judgments on counterclaims to proofs of claim was unconstitutional. For the litigants, this decision brought an end to an expensive and drawn out litigation between the estates of former Playboy model Anna Nicole Smith and the son of her late husband, Pierce Marshall, which Justice Roberts writing for the majority analogized to the fictional litigation in Charles Dickens’ Bleak House.
The Supreme Court recently issued its opinion in Stern v. Marshall (Stern), Case No. 10-179, 2011 WL 2472792 (U.S. June 23, 2011), invalidating the relatively common assumption that so called “core” bankruptcy proceedings are all matters in which the bankruptcy courts are permitted to enter final judgment, and undoubtedly fostering heightened jurisdictional scrutiny in the future.
The liquidator of Onslow Ditching Ltd (ODL), sought a declaration against two directors (on three grounds), seeking damages/fines or a contribution of assets from each director for:
On June 8, 2011, Governor Andrew M. Cuomo announced the appointment of Assemblyman Jonathan Bing to serve as Special Deputy Superintendent of the New York Liquidation Bureau, an agency tasked with protecting policyholders and creditors of insurance companies that have gone bankrupt. Bing steps in as the successor to Dennis J. Hayes, who was appointed to the position in September 2009. Bing’s appointment ends his fifth term in the New York State Assembly, where he has represented the 73rd District since November 2002.
Following the Court of Appeal decision in their application to the Court for directions to enable them to identify client money and its traceable proceeds (as previously reported here), the administrators of Lehman Brothers International (Europe) sought further directions regarding the further work to be carried out, the evidence to be prepared and the identification of appropriate respondents and sought a protective costs order.
The English High court has approved a scheme of arrangement for a company incorporated in Germany which had its centre of main interests in Germany, no establishment in the UK and no assets in the UK likely to be affected by the scheme.
This case is one of a number of recent cases where restructurings of foreign companies have been effected by English schemes of arrangement. The court set out its reasoning in this case in some detail in view of the possibility that the European Court of Justice would consider some of the relevant issues in a forthcoming appeal in another case.
In In re Young Broadcasting, Inc., et al., 430 B.R. 99 (Bankr. S.D.N.Y. 2010), a bankruptcy court strictly construed the change-in-control provisions of a pre-petition credit agreement and refused to confirm an unsecured creditors' committee's plan of reorganization, which had been premised on the reinstatement of the debtors' accelerated secured debt under Section 1124(2) of the Bankruptcy Code.
On April 25, 2011, the Rhode Island Superior Court (Silverstein, J.) ruled in favor of the constitutionality of the Voluntary Restructuring of Solvent Insurers Act (the “Restructuring Act”), a state statute enacted in 2002 that allows Rhode Island domestic commercial insurers and reinsurers (including those that redomesticate to Rhode Island) to enter into a commutation plan for their run-off business.
On February 11, 2011, the Hon Alan Gold of the United States District Court for the Southern District of Florida issued a 113 page opinion and order quashing the bankruptcy court's order requiring the lenders involved in TOUSA, Inc.'s Transeastern joint venture to disgorge, as fraudulent transfers under Section 548 of the Bankruptcy Code, settlement monies that they had received on July 31, 2007 in repayment of their existing debt and to pay prejudgment interest on such monies, for a total disgorgement in excess of $480 million.