A recent decision by the United States Court of Appeals for the First Circuit provides additional guidance with respect to jurisdictional disputes that bankruptcy professionals often see in practice. In particular, the Gupta v. Quincy Med. Ctr., 2017 U.S. App. LEXIS 9814 (1st Cir. June 2, 2017) case analyzed whether a bankruptcy court had jurisdiction to adjudicate a post-sale dispute among a purchaser of estate assets and former employees of the debtors.

Hogan Lovells partners Chris Donoho and Ron Silverman spoke to DebtWire Radio about current issues concerning cross-border restructurings. They addressed the factors that prompt foreign-based companies to avail themselves of the U.S. Bankruptcy Code in lieu of local insolvency proceedings. They also talked about the hurdles that such companies must overcome to secure a U.S. court’s administration of their Chapter 11 cases.

How does U.S. Chapter 11 law differ from other foreign insolvency regimes around the world?

On May 25, at the request of the FTC and the State of Florida, a Southern District of Florida court issued a preliminary injunction order temporarily halting a debt relief operation that bilked millions of dollars from financially strapped consumers.

In First Southern National Bank v. Sunnyslope Housing Limited Partnership, No. 12-17241 (9th Cir. May 26, 2017), the Ninth Circuit Court of Appeals, in an en banc decision, held that, for purposes of confirmation of a plan of reorganization over a mortgagee’s objection, the value of the mortgagee’s secured claim was the value of the property as low income housing not the value the mortgagee would have received on foreclosure free of the low income housing restrictions.

The Supreme Court has granted certiorari in Merit Management Group L.P. v. FTI Consulting Inc. to resolve a circuit split over the interpretation of Section 546(e) of the Bankruptcy Code, the “safe harbor” provision that shields specified types of payments “made by or to (or for the benefit of)” a financial institution from avoidance on fraudulent transfer grounds.

The Bankruptcy Code (“Code”) “requires the use of replacement value rather than a hypothetical [foreclosure] value … that the reorganization is designed to avoid,” held a divided U.S. Court of Appeals for the Ninth Circuit on May 26, 2017.

U.S. courts generally agree that the substantive consolidation should be applied sparingly, and even more so when substantive consolidation of debtors with non-debtors is sought. While many opinions address the grounds for substantive consolidation, very few cases address standing and notice issues when the sought for consolidation is of non-debtor entities. The Oklahoma bankruptcy court recently addressed these two issues in SE Property Holdings, LLC v. Stewart.

The so-called 20-day administrative priority claim (set forth in Section 503(b)(9) of the Bankruptcy Code) is perhaps the best remedy available to vendor creditors in Chapter 11 cases.

The United States Supreme Court recently held that a creditor who files a bankruptcy claim on a time-barred debt does not violate the Fair Debt Collection Practices Act (“FDCPA”). SeeMidland Funding, LLC v. Johnson, 137 S. Ct. 1407 (2017). In the case, the debtor filed for bankruptcy under Chapter 13 of the Bankruptcy Code, and the creditor filed a proof of claim asserting that it was owed credit card debt. However, the credit card had not been used in over ten years, outside Alabama’s six-year statute of limitations.

Thousands of mortgage lenders across the country either recently received, or will soon be receiving, this document from Lehman Brothers Holdings, Inc. (LBHI).