In the recent case of RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 2012 WL 1912197 (May 29, 2012), the Supreme Court in a unanimous 8-0 opinion, delivered by Justice Scalia, held that the Bankruptcy Code statutory scheme mandates that secured creditors must be allowed to credit-bid in 363 sales of assets where the sale is incorporated into a plan of reorganization.
On May 15, 2012, the Eleventh Circuit Court of Appeals issued a fraudulent transfer ruling in TOUSA, Inc.'s chapter 11 case with wide-ranging implications for the financing community. As discussed herein, this decision weakens protections for secured lenders, especially when extending credit to distressed borrowers.
The common law has long recognized a secured creditor’s duty to provide reasonable notice to borrowers before enforcing its security and appointing a receiver. The practical importance of this has become less significant since the codification of the principle of reasonable notice in section 244 of theBankruptcy and Insolvency Act (“BIA”). However, in the recent case of Bank of Montreal v.
This discussion is being provided to our clients and friends to analyze the challenges presented in this difficult economic environment when an FDICinsured institution experiences a capital difficulty and is directed by the Banking Regulators1 to restore the institution's capital adequacy.2 In the past four years, the FDIC has closed approximately 400 insured institutions—as of January 1, 2012, the FDIC has indicated that there were over 800 banks on its "problem bank list." The difficulties experienced by many of these institutions are summarized in this analysis—
In the midst of the ongoing restructurings of Nortel and AbitibiBowater, the New Democrats introduced Bill C-501 in the spring of 2010 to amend the Bankruptcy and Insolvency Act (the “BIA”) and the Companies’ Creditors Arrangement Act (the “CCAA”) with the goal of better protecting employees’ interests in the context of formal insolvency proceedings, including pension interests. However, Bill C-501 did not become law.
Introduction
In “True Lease v. Security Lease – Is the Distinction Still Relevant?” which appeared in the June 2008 issue of Collateral Matters, Jill Fraser discussed a 2007 amendment to the Personal Property Security Act (Ontario) (the “PPSA”) and whether or not the distinction between a true lease and a security lease was still relevant in light of that amendment.
Numerous municipalities in California and elsewhere are struggling financially. Indeed, Harrisburg, Pennsylvania and Central Falls, Rhode Island have both recently filed for Chapter 9 protection. State governments may have neither the economic reserves nor the political will to bail out troubled cities and counties. These circumstances have raised the focus on Chapter 9 as a tool for reorganizing municipality debt obligations and has deepened the debate between states and their municipalities about the best strategies for addressing a fiscal crisis.
Recent remarks by the English High Court in the insolvency case Green (Liquidator of Stealth Construction Limited) -v- Ireland [2011] EWHC 1305 (Ch) suggest that in some circumstances, and at least in the context of fast-moving real property transactions, an exchange of emails may well satisfy the requisite formalities for creation of a binding and enforceable contract.
Section 11.01 of the Companies’ Creditors Arrangement Act (the “CCAA”) states that no order under Section 11 or 11.02 of the CCAA has the effect of: (a) prohibiting a person from requiring immediate payment for goods, services, the use of leased or licensed property or other valuable consideration provided after the order is made; or (b) requiring the further advance of money or credit.
As most are aware by now, the Ontario Court of Appeal (the “OCA”) recently caused alarm by finding that claims of pension plan beneficiaries ranked higher than the super-priority debtor-in-possession financing charge (the “DIP Charge”) created by the amended initial order (the “CCAA Order”) in the Companies’ Creditors Arrangement Act (the “CCAA”) proceedings of the Indalex group of Canadian companies (collectively, “Indalex”).