Last year, a California Bankruptcy Court wiped out $10.2 million in default interest (“DRI”) when it ruled that a 5% DRI was an unenforceable penalty in a Chapter 11 bankruptcy case where the construction lender fully recovered principal, interest, and other costs of collection.
Bankruptcy Rule 2004 allows the examination of any entity with respect to various topics, including conduct and financial condition of the debtor and any matter that may affect the administration of the estate. Does a subordination agreement that is silent on the use of Rule 2004 prevent the subordinated creditor from taking a Rule 2004 examination of the senior creditor? Yes, says an Illinois bankruptcy court.
As we summarized in a recent Financial Services & Insolvency Communiqué, Saskatchewan has introduced Bill 151 (the Bill) which amends The Personal Property Security Act, 1993 (Saskatchewan) (the PPSA or the Act).
As we summarized in a recent Financial Services & Insolvency Communiqué, Saskatchewan has introduced Bill 151 (the Bill) which amends The Personal Property Security Act, 1993 (Saskatchewan) (the PPSA or the Act).
The Supreme Court of Canada (“SCC”) has released its decision in Orphan Well Association v.
Can a profit-sharing provision in a commercial lease survive assumption and assignment by a debtor? Analyzing such a provision, the Third Circuit answered “no,” finding the provision to constitute an unenforceable anti-assignment provision. Haggen Holdings, LLC v. Antone Corp, 739 Fed. Appx. 153 (2018).
Legal and Factual Background
Equitable mootness is a judicially created doctrine often applied in appeals from orders of bankruptcy courts confirming chapter 11 plans of reorganization. In instances where granting relief on appeal would result in overturning the confirmation order and therefore unravelling a substantially consummated chapter 11 plan, appellate courts have, in certain circumstances, abstained from deciding appeals in reliance on equitable mootness.
Will this proposal capture unfunded liabilities under defined benefit pension plans?
After Energy Future Holdings (EFH), maybe not so much. The size of the break-up fee approved by the bankruptcy court in EFH was undoubtedly large by any account – US$275 million. But it was approved following all necessary filings, notice and hearings. All parties and counsel involved were highly sophisticated and experienced. The court that approved the fee was the Delaware bankruptcy court, by all accounts one of the most experienced and sophisticated bankruptcy courts in the nation. And there wasn’t even a hint of fraud, misrepresentation or failure to disclose material facts.
Shareholder of a Korean corporation (“Cuzco Korea”), the sole member of a chapter 11 limited liability company debtor (“Cuzco USA” or the “Debtor”), brought an adversary proceeding against the Debtor and others, asserting claims directly, derivatively on behalf of Cuzco Korea and “double derivatively” on behalf of the Debtor. On the defendants’ motion to dismiss, the bankruptcy court for the district of Hawaii was required to consider the impact of Korean law on the derivative claims as well as notions of forum non conveniens.