In a recent November 17, 2016 opinion, Delaware Trust Co. v. Energy Future Intermediate Holding Company LLC, Case No. 16-1351, the Third Circuit Court of Appeals reversed two lower court opinions by holding that make-whole premiums can be enforceable even if the debt was automatically accelerated by a voluntary bankruptcy filing.

In a rare win for mortgage lenders, the 11th Circuit (controlling law in Florida, Georgia, and Alabama) ruled today that an owner who agrees to “surrender” their residence in bankruptcy court under 11 U.S.C. Section 521(a)(2)(A) also forfeits the right later to challenge any foreclosure proceedings on the property.

Vendors — take note! The Delaware bankruptcy court in In re Reichhold Holdings US Inc. recently issued an important ruling for vendors asserting reclamation rights.

The Bankruptcy Code permits a bankruptcy trustee to compel return of a payment made to a creditor within 90 days before a bankruptcy petition. 11 U.S.C. § 547(b)(4)(A). The justification for compelling the return of preference payments is to level the playing field among creditors by not rewarding those who, perhaps, pressed the debtor the hardest on the eve of bankruptcy.

In a recent decision, the U.S. Bankruptcy Court for the District of Delaware refused to enforce a provision in the debtor’s LLC operating agreement requiring a unanimous vote of the debtor’s members to authorize the debtor to file for bankruptcy. In re Intervention Energy Holdings, LLC, et al., 2016 Bankr. LEXIS 2241 (Bankr. D. Del. June 3, 2016).

On May 16, 2016, the United States Supreme Court in Husky International Electronics v. Ritz held that the phrase “actual fraud” under section 523(a)(2)(A) of the Bankruptcy Code may include fraudulent transfer schemes that were effectuated without a false representation. Section 523(a)(2)(A) provides that an individual debtor will not be discharged from certain debts to the extent that those debts were obtained by false pretenses, false representations or actual fraud.

At its heart, Episode 24 was about relationships – from the wayward dating lives of Richard and Dinesh to Big Head and Ehrlich’s marriage of “Bachmanity,” the Pied Piper entourage found themselves faced with the messy unraveling of unsuccessful relationships.

On May 16, 2016 the United States Supreme Court issued an opinion regarding the meaning of “actual fraud” under the Bankruptcy Code. Husky Int’l Electronics, Inc. v. Ritz represents a win for creditors by making it easier to show that a debtor committed fraud. A showing of a more general fraud, as opposed to a specific false representation by the debtor, will suffice to prevent certain debts from being discharged in bankruptcy.

Background

The doctrine of equitable mootness provides that Chapter 11 reorganization plans will be deemed moot, and therefore not subject to appellate review, if a plan has been substantially consummated and granting appellate relief would impair the rights of innocent third parties relying on the confirmation order.

Equitable subordination in bankruptcy can be a powerful tool, providing a court with considerable latitude to set things right insofar as the estates of the penniless and the rights of their creditors are concerned.