In a novel decision, the United States Court of Appeals for the Third Circuit held, in its ruling In re Emoral, Inc., 740 F.3d 875 (3d Cir. 2014), that personal injury claims of individuals allegedly harmed by a bankrupt debtor’s products cannot be asserted against a pre-petition purchaser of the debtor’s assets, as they are “generalized claims” which belong to the debtor’s bankruptcy estate rather than to the individuals who suffered the harm.

Background

On April 17, 2014, the Supreme Court of Canada denied leave to appeal to Nortel from the decision rendered by the Ontario Court of Appeal last October. For additional details and commentary on the decision of the Ontario Court of Appeal, please see our November 2013 Blakes Bulletin: Ontario Court of Appeal Applies AbitibiBowater Test in Concurrent Decisions.

In the recent case of Davis v. Elliot Mgmt. Corp. (In re Lehman Bros. Holdings Inc.), 2014 U.S. Dist. LEXIS 48102 (S.D.N.Y. Mar. 31, 2014), the District Court for the Southern District of New York issued a decision barring reorganization plans from paying legal fees of individual members of official creditors’ committees absent a showing of substantial contribution to the estate.

Senior Counsel Greg Laughlin discusses the legislative steps being taken to prevent future large-scale government bailouts of distressed financial institutions. From implementation of the Dodd-Frank Act to the introduction of the PATH Act in the U.S. House of Representatives, efforts are underway to end bailouts by placing greater emphasis on private capital solutions that diminish the need for taxpayer dollars.

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This article was originally published in the January 2014 issue of Pratt's Journal of Bankruptcy Law.

Preference actions are common in bankruptcy cases. These actions seek to claw back payments made by a debtor to a creditor during the 90 days before the commencement of a bankruptcy case.

Chapter 11
and CCAA
» A Cross-Border Comparison

On November 12, 2013, the Alberta government issued EPPA Update 13-01, in response to recent developments in the actuarial profession affecting defined benefit pension (DB) plans.

Since the California Mechanic's Lien Law was established more than 100 years ago, it has been black-letter law that a contractor or materials supplier has no right to assert a mechanic's lien against public property. Thus, contractors and material suppliers (and even legal practitioners) have resigned themselves to the notion that the only available remedies on "public projects" are claims against payment bonds and the enforcement of stop notices. Within the last few years, however, the inflexible rule that "you cannot lien public property" has begun to change.

On February 1, 2013, the Supreme Court of Canada (SCC) released its decision in Sun Indalex Finance, LLC v. United Steelworkers (Re Indalex). With respect to one critical issue,the SCC confirmed that a court-ordered debtor-in-possession (DIP) charge had priority over a deemed trust (akin to a statutory security interest) securing the debtor's obligation to fund a pension wind-up deficiency on the wind-up of a defined benefit (DB) pension plan.

On February 1, 2013, the Supreme Court of Canada rendered its much-anticipated decision in Sun Indalex Finance, LLC v. United Steelworkers et al. (Indalex). This bulletin focuses on pension plan administration issues arising from the Indalex case.

Facts