The Supreme Court declines to review a circuit court decision in Oneida Ltd., which held that a debtor cannot discharge in bankruptcy, as a prepetition claim, premiums it owes to the Pension Benefit Guaranty Corporation in connection with the termination of a pension plan.

Introduction

In a recent decision from the United States Bankruptcy Court for the District of Delaware, Judge Mary Walrath has required that members of an informal committee of noteholders comply with expansive disclosure requirements beyond the standard established for official committees. In a written opinion issued on December 2, 2009 in the case of In re Washington Mutual, Inc., Case No. 08-12229 (MFW), Judge Walrath granted a motion to require an informal group of noteholders to comply with Rule 2019 of the Federal Rules of Bankruptcy Procedure.

Intercreditor Agreement in ION Media requires Second Lien Lenders “Be Silent” — precludes challenge to validity of liens; deprives junior creditors of standing to object to plan of reorganization.

The Eastern District of Pennsylvania held that secured creditors do not have a right to credit bid their claim when the sale of a debtor’s assets is conducted under a plan of reorganization.

The bankruptcy court's opinion exemplifies the second guessing that can confront solvency opinion providers and highlights issues that providers should carefully vet with experienced legal counsel.

Structured finance transactions frequently subordinate a swap counterparty’s rights to termination payments upon termination of a swap by reason of counterparty default. Such a provision has recently been upheld by an English court. As the case concerns the insolvency of Lehman Brothers however, the US courts must also make a decision on the same provision.  

Belgium has modified its law on business reorganizations that involve distressed companies. The new law of January 31, 2009, on the continuity of companies came into force on April 1, 2009, replacing an unpopular and rigid law on judicial composition proceedings that dated to 1997.

This new law simplifies the rules and procedures for reorganizing distressed companies by providing a variety of new flexible out-of-court and in-court options designed to facilitate business recovery.

A pre-packaged business sale (or “pre-pack”) is an arrangement under which the sale of a company’s business or assets is agreed in principle with a buyer prior to the appointment of an insolvency practitioner (most commonly an administrator), who then executes the sale shortly after his or her appointment.

Italian Decree 134/2008, which suspended competition law for crisis buyouts, thereby allowing the merger of Alitalia and Air One, has been called into question following a claim of unconstitutionality brought by consumer association Federconsumatori, Italian airline Meridiana, its subsidiary Eurofly and the province of Milan. The question of whether the Decree potentially violates Article 3 on equal treatment and Article 41 on freedom of economic activity has now been referred to the Italian Constitutional Court.

In the matter of Bernard L Madoff Investment Securities LLC [2009] EWHC 442 (Ch), Mr Justice Lewison granted an application for the transfer of personal data in the possession of the joint provisional liquidators of a UK subsidiary to the trustee in bankruptcy of its parent company in the US, Bernard L Madoff Investment Securities LLC. The application was granted on the basis that it was necessary for reasons of substantial public interest.