A “first-time transaction can qualify” for the ordinary course of business exception to the preference recovery provision of the Bankruptcy Code (“Code”), held the U.S. Court of Appeals for the Tenth Circuit on Aug. 10, 2015. In re C.W. Mining Co., 2015 WL 4717709 (10th Cir. Aug. 10, 2015).

A Chapter 11 reorganization plan may extinguish a secured creditor’s lien if: (1) the plan “does not preserve the lien”; (2) the court confirms the plan; (3) the plan “dealt with” the lender’s collateral; and (4) the lender “participated in the bankruptcy” case, held the U.S. Court of Appeals for the Second Circuit on Aug. 4, 2015. In re Northern New England Tel. Operations, LLC, 2015 WL 4619576 (2d Cir. Aug. 4, 2015).

On 31 July 2015, the English High Court delivered its judgments in the ‘Waterfall IIA’ and ‘Waterfall IIB’ cases. The decisions are important to stakeholders in determining key questions about how, following payment in 2014 of all the provable claims, the estimated £7.39-billion surplus (the ‘Surplus’) in Lehman Brothers International (Europe) (in administration) (‘LBIE’) will be shared amongst them. For others, the decisions may be of general interest in probing some rarely aired legal issues relating to the lower levels of the insolvency payment waterfall.

A lender’s appeal from an order confirming a Chapter 11 debtor’s cramdown reorganization plan is not equitably moot when the lender “diligently sought a stay” and the court could grant effective relief, held the U.S. Court of Appeals for the Ninth Circuit on July 1, 2015. In re Transwest Resort Properties, Inc., 2015 WL 3972917, at *1 (9th Cir. July 1, 2015) (2-1).

A bankruptcy court must dismiss a creditor’s involuntary bankruptcy petition when the debtor has raised a “legitimate basis” for disputing the petitioning creditor’s underlying claim, held the U.S. Court of Appeals for the Second Circuit on July 14, 2015. In re TPG Troy, LLC, 2015 WL 4220619, at *5 (2d Cir. July 14, 2015). The Second Circuit also affirmed the bankruptcy court’s award of $513,427 in attorney’s fees and costs to the vindicated debtor under Bankruptcy Code (“Code”) Section 303(i)(1). Id. at *6.

Law360, New York (July 17, 2015, 11:24 AM ET) -- On June 26, 2015, the U.S. District Court for the Middle District of Florida issued an opinion on consolidated appeals arising from the Bayou Shores SNF LLC bankruptcy case with potentially broad implications for health care bankruptcy cases. At the heart of the dispute before the district court was whether the bankruptcy court had jurisdiction to enjoin the termination of, and subsequently authorize the assumption of, certain Medicare and Medicaid provider agreements.

On June 26, 2015, the District Court for the Middle District of Florida issued an opinion on consolidated appeals arising from the Bayou Shores SNF, LLC bankruptcy case with potentially broad implications for healthcare bankruptcy cases.  At the heart of the dispute before the District Court was whether the Bankruptcy Court had jurisdiction to enjoin the termination of, and subsequently authorize the assumption of, certain Medicare and Medicaid provider agreements in the bankruptcy case.  As discussed below, the District Court held the Medicare jurisdictional bar set fort

The claim of an insider lender (“L”) who invested “in a venture with substantial risk” and who loaned it additional funds on a secured basis to salvage its business should not be recharacterized as equity or subordinated on equitable grounds, held the U.S. Court of Appeals for the Tenth Circuit on June 12, 2015. In re Alternate Fuels, Inc., 2015 WL 3635366 (10th Cir. June 12, 2015) (2-1) (“AFI”).

On April 8, 2015, we distributed a Corporate Alert outlining two important decisions of the US District Court for the Southern District of New York and their potential effects on future debt exchange offers.1 Since then, the Education Management court has issued a final ruling on the following question, as stated by the court in its most recent decision: “does a debt restructuring violate Section 316(b) of the Trust Indenture Act (the Act) when it does not modify any indenture term explicitly governing the right to receive interest or principal on

Is market value sufficient proof of reasonably equivalent value for purposes of the good-faith-for-value defense under Texas law? The U.S. Court of Appeals for the Fifth Circuit certified that question to the Texas Supreme Court on June 30, 2015, after vacating its earlier decision in Janvey v. The Golf Channel, Inc., 2015 WL 3972216, at *3 (5th Cir. June 30, 2015).