On August 11, the Honorable Allan L. Gropper issued an opinion of the U.S. Bankruptcy Court for the Southern District of New York denying five motions to dismiss certain Chapter 11 bankruptcy cases of several property-specific special purpose subsidiaries (SPE Debtors), including a number of issuers of commercial mortgage-backed securities (CMBS), that are owned by mall operator General Growth Properties, Inc.
On August 11, the U.S. Bankruptcy Court for the Southern District of New York denied five motions to dismiss certain Chapter 11 bankruptcy cases filed by debtors, including a number of issuers of commercial mortgage-backed securities (CMBS), that are owned by mall operator General Growth Properties, Inc. (GGP). The movants, including special servicers of the CMBS issued by GGP, based their dismissal motions primarily on a claim that the debtor’s cases were filed in bad faith.
The Commodity Futures Trading Commission has proposed to amend its Bankruptcy Rules, 17 CFR Part 190, to establish cleared over-the-counter derivatives as a separate account class for the purpose of calculating “net equity” and “allowed net equity” for each customer in the event of the bankruptcy of a futures commission merchant.
The court overseeing the chapter 11 bankruptcy cases of Lehman Brothers Holdings Inc. and various subsidiaries (the “Debtors”), has entered an order establishing deadlines and procedures for filing claims against the Debtors. In terms of procedural requirements, the order places unusual burdens on parties whose claims are based on derivative contracts and guarantees.
On May 26, Lehman Brothers Holdings Inc. (LBHI) filed a motion requesting the U.S. Bankruptcy Court for the Southern District of New York to establish August 24 as the deadline for filing proofs of claim against LBHI and its affiliates, and to establish a procedure for such filing, including a required form to be completed online relating to derivatives claims, and a new proof of claim form specific to this case.
On April 16, General Growth Properties, Inc. and certain of its affiliates (“GGP”) filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of New York. GGP operates a national network of approximately 200 shopping centers. To the surprise of many, most of GGP’s property-specific SPE subsidiaries (“SPE Debtors”) also filed for bankruptcy.
After a relatively brief and checkered stint in Delaware courts, it appears that the cause of action against corporate directors for “deepening insolvency” may have lost its place in Delaware corporate jurisprudence.
The United States Bankruptcy Court for the Middle District of Pennsylvania recently found that a bankruptcy trustee could not either pierce the corporate veil of a limited liability company to reach the owners of the LLC, nor could the trustee “reverse-pierce” the corporate veil of the owners of the LLC to reach a separate restaurant business that they owned.
On March 12, West Coast Life Insurance Co. added civil conspiracy and several violations of Florida law to a complaint alleging that an investment company, several insurance brokers and individual policyholders engaged in an illegal stranger-owned life insurance (STOLI) scheme. The amended complaint alleges that Park Venture Advisors masterminded and implemented the plan, which involved the sale of individual life insurance policies to private investors, while Wells Fargo Delaware Trust Co.
On December 29, the UK Treasury published a summary of responses to its consultation on its proposals to reform Part 7 of the UK Companies Act 1989 and related legislation. Part 7 of the Companies Act 1989 modifies the UK’s general insolvency law to provide systemic protection for recognized investment exchanges and recognized clearinghouses in the event of a default by one of their members