The Bankruptcy Court for the Northern District of California recently granted a secured lender’s request for relief from the automatic stay, pursuant to sections 362(d)(1) and (d)(2) of the Bankruptcy Code, to allow a trustee’s sale of the debtor’s marina under state law. In re Delta Waterways, LLC, Case No. 18-42076-CN (Bankr. N.D. Cal. December 7, 2018). Several missteps and omissions by the debtor appear to have driven the Court’s decision.

Section 303 of the Bankruptcy Code provides a unique remedy to unsecured creditors seeking to collect their debts against an insolvent entity. A careful look at this remedy is contained in an earlier post, entitled Creditors’ Strategic Use of Involuntary Bankruptcy.

On December 12, 2018, Parker Drilling Company and its subsidiaries (“Debtors”), oilfield service companies headquartered in Houston, filed pre-negotiated chapter 11 cases in the United Stated Bankruptcy Court for the Southern District of Texas. The Honorable Marvin Isgur is Presiding over the cases.

The Companies operate in two lines of business: (a) drilling services (i.e., oil, natural gas, and geothermal wells); and (b) rental tools and well services to E&P companies, drilling contractors and service companies.

Section 303 of the Bankruptcy Code provides a unique remedy to unsecured creditors seeking to collect their debts against an insolvent entity.  A careful look at this remedy is contained in an earlier post, entitled Creditors' Strategic Use of Involuntary Bankruptcy.  In summary, pursuant to section 303, three unsecured creditors, with claims in the aggregate of $15,775, can place an insolvent company in bankrup

In 2018 the Supreme Court delivered its much-awaited decision in the case of SPV OSUS Ltd v HSBC Institutional Trust Services (Ireland) Ltd & Ors where it confirmed that the assignment of a claim is unenforceable in Irish law unless the assignment is ancillary to a bona fide transaction or the assignee has a genuine commercial interest in the assignment.

Overall 2018 has produced a number of positive judgments from the perspective of lenders and insolvency practitioners.

In particular, the courts delivered many useful judgments disposing of numerous challenges to the enforceability of loans and security and, also, restricting abuse of the courts’ processes.

Contemptuous McKenzie Friends

In In re Fairfield TIC, LLC, Case No. 18-73744-VJ (E.D. Va. Nov. 20, 2018), the Bankruptcy Court for the Eastern District of Virginia dismissed a single asset real estate case, pursuant to section 1112(b) of the Bankruptcy Code, on “bad faith” grounds, based on the holding in Carolin Corp. v. Miller, 886 F.2d 693 (4th Cir. 1989).    

Facts

On Wednesday, December 5, 2018, USA Gymnastics (USGA) filed for chapter 11 relief in the United States Bankruptcy Court for the Southern District of Indiana (Case No. 18-09108). USGA is the national governing body for gymnastics in the United States. It receive this designation from the U.S.

On December 5, 2018, Senior Care Centers, LLC and 120 subsidiaries (collectively, the “Debtors”) filed for chapter 11 relief in the United States Bankruptcy Court for the Northern District of Texas. The Debtors are one of the largest providers of skilled nursing services in the country, providing care on a daily basis to approximately 9,000 patients. The Debtors’ facilities include nursing, living and hospice facilities, which are located throughout Texas and Louisiana.

In IDEA Boardwalk, LLC v. Revel Entertainment Group, LLC (In re Revel AC Inc.), Case No. 17-3607, –F.3d–, 2018 WL 6259316 (3rd Cir. Nov. 30, 2018), the Third Circuit Court of Appeals recently enforced a tenant’s right to offset rent under a rejected lease of real property, pursuant to section 365(h) of the Bankruptcy Code and the doctrine of equitable recoupment.

Facts