The United States Court of Appeals for the Third Circuit issued an opinion on December 24, 2019, In re Homebanc Mortgage Crop., No. 18-2887, 2019 WL 7161215(3rd Cir. De. 24, 2019) that has significant consequences for participants in repurchases transactions. The court affirmed the lower court judgment, that the securities had been liquidated in good faith.

Facts

Section 546(e) of the Bankruptcy Code is a safe harbor provision that establishes that a trustee or debtor-in-possession may not avoid a transfer “by or to... a financial institution.. in connection with a securities contract” other than under an intentional fraudulent conveyance theory. On December 19, 2019, the Second Circuit in Note Holders v.

In 2007, Philadelphia Entertainment and Development Partners, LP dba Foxwoods Casino Philadelphia (“Plaintiff”) secured a gaming license from Pennsylvania for $50,000,000 with the understanding that it open its casino business within one year. Plaintiff failed to do so and, despite a number of extensions, Pennsylvania cancelled and revoked the gaming license in December 2010. Without a gaming license, Plaintiff found itself in chapter 11 by spring of 2014.

2019 was a busy year for corporate restructuring practitioners in Canada. The year saw an uptick in CCAA filings nationwide, with 38 total proceedings (up from the total of 21 filings in 2018). The Canadian restructuring landscape also some significant shake-ups, with important decisions and extensive legislative changes. The highlights are summarized below:

BIA & CCAA Amended

The Bankruptcy Protector has previously provided a succinct summary of all cases decided post-Jevichere and

In In re FirstEnergy Solutions Corp., 2019 WL 6767004 (6th Cir. Ct. App.), the United States Court of Appeals affirmed in part, reversed in part, and remanded to the bankruptcy court for further consideration, the determination that the bankruptcy court held exclusive and unlimited jurisdiction and therefore could enjoin FERC from taking action regarding energy contracts because under the BJR they were financially burdensome on FES and as such could be rejected.

Facts

In Firepower Debt GP Inc. v.

The First Circuit Court of Appeals issued an opinion on October 29, 2019, in In re TelexFree, LLC, No. 18-2001, 2019 WL 5558088, at *1 (1st Cir. Oct. 29, 2019) that has significant consequences for ponzi scheme litigation in bankruptcy court.

The TelexFree Ponzi Scheme and Related Bankruptcy Litigation

Extensive amendments to the Bankruptcy and Insolvency Act (“BIA”) and Companies’ Creditors Arrangement Act (“CCAA”) coming into force on November 1, 2019 through Bill C-97 will have a significant effect on certain aspects of insolvency proceedings commenced after that date. The wide-ranging revisions to both the BIA and CCAA will likely foster changes to the currently existing insolvency and restructuring practice in Canada.

Bill C-97 Overview

Bill C-97 amends both the BIA and CCAA to:

Des modifications importantes à la Loi sur la faillite et l’insolvabilité ("LFI") et à la Loi sur les arrangements avec les créanciers des compagnies ("LACC") entreront en vigueur le 1^er novembre 2019 avec l’adoption du projet de loi C-97. Elles auront une incidence importante sur certains aspects des procédures d’insolvabilité entreprises après cette date.