Under section 1111(b) of the U.S. Bankruptcy Code, a non-recourse secured creditor that holds “a claim secured by a lien on property of the estate” is granted recourse against the bankruptcy estate upon the filing of a chapter 11 bankruptcy petition. But what happens when there has been a post-petition foreclosure on such property, so that it is no longer part of the estate and the liens have been extinguished? Can the creditor still use section 1111(b) to assert a claim against the bankruptcy estate? The Ninth Circuit answered no in Matsan v.
After several years of drafting, debate, compromise and fine tuning, it appears that major changes to the administration of consumer bankruptcy cases are imminent. On April 27, 2017, Chief Justice John Roberts submitted to Congress amendments to the Federal Rules of Bankruptcy Procedure that will have a profound impact on consumer bankruptcy cases.
Recent Developments in Acquisition Finance
A U.S. House of Representatives Bill would amend the Bankruptcy Code to establish new provisions to address the special issues raised by troubled nonbank financial institutions.
In a highly anticipated bankruptcy opinion, the United States Supreme Court, in Czyzewski v. Jevic Holding Corp., held that courts may not approve structured dismissals providing for distributions that deviate from the priority rules prescribed in the Bankruptcy Code, absent consent of the affected creditors.
Companies that the Financial Stability Oversight Council (FSOC) believes may be subject to FDIC receivership under the Orderly Liquidation Authority contained in Title II of the Dodd-Frank Act, and certain of their affiliates, are now subject to recordkeeping requirements related to their “qualified financial contracts”1 (QFCs).
A debtor ordinarily may discharge debts in bankruptcy, unless one of several exceptions apply. One of the preclusions to dischargeability of certain debts, found in Section 523(a)(19) of the U.S.
No, says the U.S. Court of Appeals for the Tenth Circuit in In re Cowen, adopting the minority rule and parting ways with four other Courts of Appeals.
The doctrine of substantive consolidation (generally- the power of a bankruptcy court to consolidate the assets and liabilities of affiliated entities in bankruptcy) is a recognized remedy exercised by bankruptcy courts – one that strikes fear into the hearts of many lenders. Justifiably so. The doctrine can be employed to order the substantive consolidation of related-debtor entities in bankruptcy and it can also be employed to substantively consolidate the assets of a debtor in bankruptcy with those of a related entity that is not a debtor in bankruptcy.
In a 2-1 opinion, the Second Circuit overruled the district court in Marblegate Asset Management LLC v. Education Management Corp., finding no violation of the Trust Indenture Act (“TIA”) in connection with an out-of-court debt restructuring.
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