Directors and officers of corporations are often subject to potential personal liabilities as a result of their positions. This potential for personal liability may be increased in the insolvency context, where a corporation’s creditors will seek to collect on certain debts from alternate sources, such as directors and officers. Directors and officers often utilize insurance and various court mechanisms in order to mitigate their personal liabilities.

As the financial crisis unfolds, the impact on U.S. financial institutions of all sizes continues to grow. The Federal Deposit Insurance Corporation (FDIC) took over 140 failed banks in 2009 at a cost of $27.8 billion to the Deposit Insurance Fund, a new high since the end of the savings and loan crisis of the late 80s and early 90s. For 2010, the FDIC is preparing for even more bank failures, increasing its budget by 35 percent and adding more than 1,600 to its staff.

The recently passed federal appropriations bill provides a mechanism for certain terminated auto dealers to seek relief through arbitration. If the dealer succeeds in the arbitration process, the manufacturer is required to enter into a letter of intent for a sales and service agreement with that dealer.

Auto Dealers Eligible for Arbitration

On October 30, 2009, the Supreme Court of Canada released its long-anticipated decision in Quebec (Revenue) v. Caisse populaire Desjardins de Montmagny. At issue in this case (and two companion cases) was the legal characterization of Crown rights with respect to collected but unremitted GST and Quebec sales tax (QST) in the hands of a trustee in bankruptcy. The Supreme Court confirmed that the Crown is an ordinary unsecured creditor with respect to such amounts, subject to the rights of prior ranking security holders.

Summary of Facts

470-Unit Apartment Complex in Pittsburgh, Pennsylvania In re Ventana Hills Associates, Ltd. (Bankr. N.D. Ill.) Case no. 09-41755 In re Ventana Hills Phase II, L.P. (Bankr. N.D. Ill.) Case no. 09-41758

470-Unit Apartment Complex in Pittsburgh, Pennsylvania In re Ventana Hills Associates, Ltd. (Bankr. N.D. Ill.) Case no. 09-41755 In re Ventana Hills Phase II, L.P. (Bankr. N.D. Ill.) Case no. 09-41758

Publishing Company in Pleasantville, New York In re Reader’s Digest Sales and Services, Inc. (Bankr. S.D.N.Y.) Case no. 09-09548

5620 Central Avenue, LLC recently filed for Chapter 11 bankruptcy, and, although no sale has been announced, the Debtor’s assets may be available for acquisition under the right circumstances. The Debtor’s real property is located at 5620 Central Avenue in El Cerrito, California, valued at $6 million. The property is described as parcels 510-053-32, 510-053-33 and 510-053-25. Real estate listings describe the property as a 142,000 sq. ft. vacant lot that is zoned C-3 Regional Commercial. The Debtor did not list any income.

Stricker LP recently filed for Chapter 11 bankruptcy and, although no sale has been announced, the Debtor’s assets may be available for acquisition under the right circumstances. The Debtor owns a building and 7.9 acres of commercial zoned property located at 2201 East Lamar Boulevard, Arlington, Texas, valued at $19.8 million. The Debtor’s income from the operation of business for 2007 was $69,969 and for 2008 it was $60,667.

BGM Pasadena LLC recently filed for Chapter 11 bankruptcy, and, although no sale has been announced, the Debtor’s assets may be available for acquisition under the right circumstances. The Debtor’s real property is located at 210, 244 and 248 Orange Grove Boulevard and 369 and 375 West Del Mar Boulevard in Pasadena, California, valued at $10 million. The property is described as office and apartment buildings, with one commercial lease, seven residential leases, and one vacant residential unit.