Firm Articles | Global Insolvency

The House Judiciary Committee recently heard testimony on the benefits and pitfalls of proposed legislation that would change bankruptcy venue rules by imposing limitations on where corporations may file for bankruptcy protection. The hearing came in the wake of a statement by Judiciary Committee Chairman Lamar Smith, R-Texas, in which he asked how Enron had been able to file its bankruptcy case in Manhattan considering that Enron was based in, and had substantially all of its assets and operations in, Texas.

USA, Insolvency & Restructuring, ArentFox Schiff, Public company, Bankruptcy, Debtor, Testimony, Stakeholder (corporate), Forum shopping, Parent company, US Congress, US Senate Committee on the Judiciary, US House of Representatives, US House Committee on the Judiciary, Enron

Common attornment provision held ineffective after master lease and sublease rejected in bankruptcy by debtor-sublandlord

04 October 2011

In Green Tree Serv., LLC v. DBSI Landmark Towers LLC,1 a case that is significant for landlords and leasing attorneys, the Eighth Circuit recently held that a subtenant of commercial office space was permitted to vacate its leased premises after the rejection of the master lease and sublease by the debtor-sublandlord, notwithstanding an attornment provision in the sublease requiring the subtenant to attorn2 to the landlord when the landlord either terminates the master lease or otherwise succeeds to the interest of the sublandlord under the master lease.

USA, Insolvency & Restructuring, Litigation, Real Estate, Greenberg Traurig LLP, Bankruptcy, Debtor, Landlord, Leasehold estate, Interest, Limited liability company, Vacated judgment, Title 11 of the US Code, Eighth Circuit, United States bankruptcy court

In the courts

26 September 2011

On September 16, 2011, the U.S. Department of Justice amended its complaint to enjoin the AT&T/T-Mobile merger to include the states of New York, California, Illinois, Pennsylvania, Massachusetts, Washington, and Ohio as additional plaintiffs. United States v. AT&T Inc., No. 11-cv-1560 (D.D.C.).
On September 19, 2011, the United Stated District Court for the Northern District of Texas largely denied the motion to dismiss of Verizon Communications, and related entities, against claims that they defrauded investors and creditors via spinoff company Idearc.

USA, Competition & Antitrust, Corporate Finance/M&A, Insolvency & Restructuring, Litigation, Telecoms, ArentFox Schiff, Punitive damages, Bankruptcy, Injunction, Fraud, Dividends, Fiduciary, Debt, US Department of Justice, Verizon Communications, T-Mobile, US District Court for Northern District of Texas

Help wanted (but debtors need not apply)

09 September 2011

Employers are constrained by dozens of rules and regulations limiting their hiring criteria. In today’s economy, one question that often arises is whether employers may refuse to hire bankrupt job applicants. Surprisingly, the answer for private employers may be yes.

USA, Employment & Labor, Insolvency & Restructuring, Litigation, ArentFox Schiff, Credit history, Bankruptcy, Debtor, Discrimination, Economy, Credit score, Eleventh Circuit

FDIC approves final executive pay clawback rule

07 July 2011

The Federal Deposit Insurance Corporation (“FDIC”) has approved a final rule authorizing it to clawback any compensation senior executives and directors received within two years of the FDIC being appointed receiver, if the FDIC finds they were “substantially responsible” for the failed condition of a covered financial company. Of particular concern, the rule (implementing section 210(s) of the Dodd-Frank Act):

USA, Banking, Capital Markets, Insolvency & Restructuring, Insurance, Greenberg Traurig LLP, Fraud, Board of directors, Executive compensation, Negligence, Legal burden of proof, Gross negligence, Federal Deposit Insurance Corporation (USA), Dodd-Frank Wall Street Reform and Consumer Protection Act 2010 (USA)