The District Court for the Southern District of New York recently affirmed the Bankruptcy Court’s decision to approve the method used by trustee of the estate of Bernard L. Madoff Investment Securities LLC (BLMIS) to value the net equity of transfers between BLMIS accounts. See In re BLMIS (Melton Tr. v. Picard), Case No. 1:15-cv-01195-PAE (S.D.N.Y. Jan. 14, 2016).

Background

Many courts recognize that a corporation's constituent (such as an audit committee or a group of independent directors) can own the privilege and work product protection covering the constituent's internal corporate investigation. Under this approach, the company's bankruptcy trustee cannot access or waive that privilege or work product protection. See, e.g., Ex parte Smith, 942 So. 2d 356 (Ala. 2006) (denying a bankruptcy trustee's attempt to access pre-bankruptcy communications between the company's independent directors and its Skadden Arps lawyers).

On Sept. 30, a district court resolved a significant portion of outstanding litigation in the bankruptcy proceeding of Lehman Brothers Holdings Inc. and its subsidiaries.See Lehman Bros. Holdings Inc. v. JPMorgan Chase Bank, N.A. (In re Lehman Bros. Holdings Inc.), No. 1:11-cv-06760 (S.D.N.Y. Sept., 30, 2015). This litigation flows from the debtors’ allegations that JPMorgan Chase Bank, N.A. (JPMC) coerced billions of dollars from Lehman on the eve of its bankruptcy filings in September 2008. Lehman Brothers Holdings Inc.

Nearly four years after its decision in Stern v. Marshall raised new doubts about the place of bankruptcy courts in our legal system, the Supreme Court has finally put those doubts to rest. This week, in Wellness International Network, Ltd. v. Sharif, No. 13-935, the Court held that even for claims that must otherwise be resolved by an Article III court, a bankruptcy court may still adjudicate the matter based on consent.

A recent bankruptcy decision in Florida may have implications for troubled healthcare entities that seek to avoid Medicare termination and preserve reimbursements. In the case In re: Bayou Shores SNF, LLC, Case No. 8:14-bk-09521-MGW, (Bankr. M.D. Fla. Dec. 31, 2014), the bankruptcy court found that a nursing home’s Medicare provider agreement had survived bankruptcy despite notice and intent to terminate the agreement issued by the Center for Medicare and Medicaid Services (CMS).

Swiss Investigating Magistrate Entitled to U.S. Documents

The International Swaps and Derivatives Association, Inc. (“ISDA”) published the ISDA 2014 Resolution StayProtocol (the “Protocol”) on November 12, 2014 in response to continued efforts by regulators to build additional flexibility into the statutory regimes that would apply in the event of the insolvency of a major financial institution.

On October 31, 2014, the U.S. Court of Appeals for the 4th Circuit interpreted Maryland law in ruling that a bank’s security interest in a Chapter 11 debtor’s property created by a deed of trust that was executed before, but recorded after, the Internal Revenue Service filed a tax lien, had priority over the tax lien.

Background

Crumbs Bake Shop Inc. shut down in July and filed for bankruptcy in New Jersey court that same month. The bankruptcy court ordered an auction sale, and a purchaser has come forward to buy all of the company’s assets.

A class of consumers suing the bankrupt Kangadis Food Inc. over its allegedly misleading olive oil purity claims is now suing the owners of the company in a separate class action aimed at holding them accountable.