In a ruling predicted by the Restructuring Review Blog last month, Judge Meredith A. Jury of the U.S. Bankruptcy Court for the Central District of California rejected arguments by CalPERS that the Bankruptcy Court should lift the automatic stay and require San Bernardino to pay pension obligations owed to the pension fund. In re City of San Bernardino, California, Case No. 12‑blk‑28006‑MJ , (Bankr. C.D. Cal. Dec. 21, 2012) (Docket No. 299).

August 31, 2012: Second Circuit Adopts Abuse of Discretion Standard of Review for Equitable Mootness Decisions

March 9, 2012: Publication of Dynegy Examiner’s Report

With companies facing significant distress due to vast over-leverage, debtors have increasingly turned to asset sales under Section 363 of the Bankruptcy Code, rather than Chapter 11 plans, to dispose of their assets quickly and begin the process of winding down their estates.  According to the UCLA-LoPucki Bankruptcy Research Database, less than 4 percent of all large, public company bankruptcies were resolved by substantial asset sales  from 1990-2000.  However, in the period from 2001-2010, that figure rose to nearly 20 percent – peaking in 2011 when 43 percent of large pu

California has seen a string of three Chapter 9 filings this year and faces a long line of distressed municipalities.  Given this backdrop, the California Public Employees’ Retirement System (“CalPERS”) figures to play a prominent role in the resolution of many of these situations (in or out of bankruptcy).  Thus, the bond‑buying public will scrutinize closely any steps that CalPERS takes to protect its claims in the Bankruptcy Court.

Following the pattern recently established by other S.D.N.Y.

On November 7, 2012, Judge Lewis A. Kaplan for the United States District Court of the Southern District of New York held that payments made in connection with a leveraged buyout to holders of privately held securities were safe harbored under section 546(e) of the Bankruptcy Code notwithstanding the fact that the payments passed directly from the purchaser to the seller without the use of any financial intermediary. AP Services LLP v. Silva, et al., Case No. 11-03005 (S.D.N.Y. Nov. 7, 2012).

On November 27, 2012, in a ruling that undoubtedly will impact the choice of venue for many large corporate bankruptcies in the future, Judge Shelley C. Chapman of the United States Bankruptcy Court for the Southern District of New York transferred venue of the chapter 11 cases of Patriot Coal Corporation and ninety-eight of its affiliates to the Eastern District of Missouri.

Cadwalader partner Richard Nevins discusses developments in European restructurings with Doug Mintz, Restructuring Review's Co-Editor-in-Chief and Cadwalader Special Counsel.

After a final mediation session between Hostess and its unions failed to put Hostess’s reorganization back on track, Bankruptcy Judge Robert Drain authorized the orderly wind down of Hostess’s operations.  As a result, Hostess will prepare to sell its assets and shut down its factories.  However, a purchaser may seek to restart the production of the beloved baked goods such as Twinkies, Ho-Hos and Donettes.