A New York bankruptcy court recently considered the effects of Bankruptcy Code section 552 on a lender’s security interest in the proceeds of an FCC broadcast license and held that a prepetition security interest extended to proceeds received from a post-petition transfer of the debtors’ FCC license. Sprint Nextel Corp. v. U.S. Bank. N.A. (In re Terrestar Networks, Inc.), Case No. 10-15446, Adv. Pro. No. 10-05461 (Bankr. S.D.N.Y. Aug. 18, 2011). This result directly conflicts with Spectrum Scan LLC v. Valley Bank and Trust Co. (In re Tracy Broadcasting Corp.), 438 B.R.

On September 19th, the Ninth Circuit considered whether the exception to Chapter 7 bankruptcy discharge for debts resulting from a violation of state or federal securities laws applies when the debtor himself is not culpable for the securities violation that caused the debt. The case involved an attorney who was required by court order to return the unearned retainer paid by a company that engaged in securities fraud. The attorney filed a petition for Chapter 7 bankruptcy before he was technically required to return the money.

Sending the Debtors back to the drawing board after almost three years in bankruptcy, in a 139 page opinion, the Bankruptcy Court has for the second time denied confirmation of the Plan of Reorganization for Washington Mutual, Inc. (“WaMu”), which was the owner of the largest savings bank ever to be seized by the FDIC.

In an application to wind up a BVI company the BVI Court re-stated the rules on when a foreign judgment creates an issue estoppel. Following The Sennar [1985] 1 WLR 490 the Court found that there would be an estoppel where a foreign judgment is (1) of a court of competent jurisdiction; (2) is final and conclusive; and (3) on the merits.

In a decision of interest in a number of jurisdictions where these types of claims have been made, the BVI Commercial Court handed down judgment today in the claim brought by the liquidators of Fairfield Sentry Limited, a BVI fund which invested in Bernard Madoff’s investment vehicle.

On September 13th, the FDIC voted to approve a final rule to be issued jointly with the Federal Reserve Board that would implement Section 165(d) of the Dodd-Frank Act. That provision requires bank holding companies with assets of $50 billion or more and companies designated as systemic by the Financial Stability Oversight Council to report periodically to the FDIC and the Federal Reserve the company's plan for its rapid and orderly resolution in the event of material financial distress or failure. The Federal Reserve will consider whether to adopt the rule shortly.

The opinion issued by the Delaware Supreme Court (the “Court”) in the matter of CML V, LLC v. Bax, No. 735, 2010 (Del. Supr. Sept.

On September 7th, the FDIC announced the launch of a new program to encourage small investors and asset managers to partner with larger investors to participate in the FDIC's structured transaction sales for loans and other assets from failed banks. The Investor Match Program will help to facilitate partnerships in order to bring together sources of capital and expertise. Participants in the program will use a customized database to identify potential collaborations, which will be identified at the sole discretion of the participating firms.

On August 22nd, the Federal Reserve Board proposed a two-year phase-in period for most savings and loan holding companies ("SLHCs") to file Federal Reserve regulatory reports with the Board and an exemption for some SLHCs from initially filing Federal Reserve regulatory reports. Under the Dodd-Frank Act, supervisory and rulemaking authority for SLHCs and their non-depository subsidiaries was transferred from the OTS to the Board. The Board previously sought comment on whether to require SLHCs to submit the same reports as bank holding companies.

On August 24th, the Third Circuit issued an opinion warning lawyers of the hazards posed by over-reliance upon automated, computerized communications between counsel and client. In doing so, it reinstated an order sanctioning a lawyer and her law firm for making false filings with the bankruptcy court. In re: Niles C. Taylor.