The U.S. Supreme Court held that a secured creditor in a chapter 7 bankruptcy case is protected from having its lien “stripped off” even if the collateral securing its claim is worth less than the claims asserted by a senior secured creditor; i.e.the junior creditor’s secured claim is completely "out of the money.” The June 1, 2015 decision, Bank of America, N.A. v. Caulkett, reaffirmed the Court’s prior holding in Dewsnup v.

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A US Bankruptcy Judge recently approved the sale of a package of RadioShack’s intellectual property assets—including consumer data obtained from RadioShack customers—to General Wireless Inc., the hedge fund affiliate that acquired over 1,700 RadioShack stores in February. The sale was not without controversy.

Much has been written in the past several years regarding the scope of a bankruptcy court’s jurisdiction in the wake of the Supreme Court’s decisions in Stern v. Marshall, 564 U.S. ___ (2011) and Executive Benefits Ins. Agency v. Arkison, 573 U.S. ___ (2014). Now, the Supreme Court has weighed in again in the case of Wellness Int’l Network, Ltd., et al v. Sharif, 575 U.S. ___ (2015) in an attempt to clarify the confusion created by Stern.

On May 26, the U.S. Supreme Court held that, so long as parties knowingly and voluntarily consent, a bankruptcy court can issue final orders on matters that it otherwise would not have the constitutional authority to decide. In Wellness Int’l Network v. Sharif,¹ a highly anticipated decision, the majority of the Supreme Court delivered a pragmatic opinion that quelled fears stemming from the Court’s 2011 decision in Stern v.

Recently, Corinthian Colleges, Inc., one of the United States' largest for-profit educational conglomerations with 72,000 students across 107 campuses, filed (along with 25 affiliated subsidiaries) a chapter 11 voluntary petition for bankruptcy protection. Corinthian reported $19.2 million of total assets and US$143.1 million of total debts, and plans to liquidate.

What happens when a debtor, whose loan is pooled and securitized, files for bankruptcy? Are payments made to investors recoverable as fraudulent transfers or preferences?

In what appears to be a matter of first impression, the U.S. Bankruptcy Court for the Northern District of Illinois recently held that payments made to investors in a two tiered securitization structure commonly employed in commercial mortgage-backed securitization (“CMBS”) transactions are largely protected from fraudulent or preferential transfer claims by the securities contract safe harbor set forth in Bankruptcy Code section 546(e). Specifically, in Krol v.

Chief Judge Leonard P. Stark of the District Court for the District of Delaware reversed and remanded the decision of the Bankruptcy Court which approved a Bankruptcy Rule 9019 settlement that Judge Stark concluded had been inadequately noticed under the circumstances.

Chief Judge Cecelia G. Morris of the Bankruptcy Court for the Southern District of New York decided that banks may not place an administrative freeze, even a temporary one, on the bank account of an individual who files for bankruptcy.

* This article was first published by INSOL International on April 17, 2015.