The Connecticut Appellate Court has weighed in on the topic of whether or not a lender foreclosing a mortgage in Connecticut must comply with the statutory process to make the administrator of the decedent a party to the action to ensure a proper judgment of foreclosure enter…sort of.

The Board of Governors of the U.S. Federal Reserve System (Board) recently proposed a rule (Proposed Rule) that will impact parties to any "qualified financial contract" (QFC), as described below, with a global systemically important banking organization (GSIB) or a GSIB affiliate (together, a covered entity). The Proposed Rule will eliminate certain contractual rights with respect to the QFC when:

the covered entity counterparty is placed in a Federal Deposit Insurance Corporation (FDIC) receivership; or

(7th Cir. June 10, 2016)

The Seventh Circuit reverses, holding the bankruptcy court applied too narrow of a baseline payment range to the creditor’s ordinary course defense in this preference action. While this court agreed that there were a few payments outside the ordinary course, the new value defense applied to completely offset those payments. Opinion below.

Judge: Sykes

Attorneys for Appellant: Nixon Peabody LLP, Richard Scott Alsterda, Theodore Eric Harman

Attorneys for Appellee: Clark Hill PLC, Pamela Joy Leichtling, Scott N. Schreiber

The Bankruptcy Judges and Chapter 13 Trustees for the United States Bankruptcy Court for the Southern District of Ohio have reviewed and approved a proposed District Wide Mandatory Form Chapter 13 Plan and proposed form Order Confirming Chapter 13 Plan and Awarding Attorney Fees. Currently, the Dayton, Cincinnati, and Columbus Bankruptcy Courts use different Chapter 13 form plans. The use of these different form plans makes it difficult for practitioners and creditors to keep track of the particular requirements for each court location.

A Delaware bankruptcy court has joined what appears to be a recent trend toward invalidating limited liability company operating agreement provisions that effectively afford lenders veto power over the LLC’s authority to file for bankruptcy protection; the court found one such provision void as contrary to federal public policy. In re Intervention Energy Holdings, LLC, et al., Case No. 16-11247 (KJC) (D.I. 69), 2016 W.L. ___________ (Bankr. D. Del. June 3, 2016).

A recent case out of the Southern District of New York, Citibank, NA, London Branch v. Norske Skogindustrier ASA(S.D.N.Y. March 8, 2016), once again illustrates the difficulty of obtaining injunctive relief against prospective indenture violations of a financially troubled issuer.

The Facts

With the current interest being focused on Section 316(b) of the Trust Indenture Act, this may be a good time to examine the differing rights of noteholders under an indenture governed by the TIA and the rights of lenders under credit agreements governed by New York law.

Essentially all securitization structures utilize a bankruptcy remote entity, a/k/a special purpose entity (“SPE”), to reduce the lenders’ or investors’ exposure to a bankruptcy of the sponsor. A standard feature of SPEs is the appointment of an independent person (director, member, manager) to the body managing the SPEs. That independent person’s consent is required for “major decisions,” one of which is the filing of, or consenting to a bankruptcy of the SPE (hence the court’s reference to them as “blocking directors”).

The courts have long struggled with the question of whether particular orders entered by a bankruptcy court are final, and therefore appealable as a matter of right. It is generally recognized that a bankruptcy case is distinctly different from the usual civil case in that it is a framework within which a variety of disputes arise and are resolved. That distinction is recognized in 28 U.S.C. §158(d)(1), which provides that appeals as of right maybe taken not only from final judgments in cases but from “final judgments, orders, and decrees…in cases and proceedings….”

The Eleventh Circuit has made it clear: it will not back down from its decision in Crawford v. LVNV Funding, a decision it issued in 2014 and one which has been the subject of hot debate ever since.In Crawford, the Eleventh Circuit ruled that the filing of a proof of claim was an attempt to collect a debt and that the filing of a proof of claim on time barred debt violated the FDCPA. Crawford v. LVNV Funding, LLC, 758 F.3d 1254 (11^th Cir. 2014).