The Seventh Circuit (which covers Illinois, Indiana, and Wisconsin) appears to have added a new and potentially conflicting standard in analyzing a third-party transferee’s “good faith” defense to a fraudulent transfer claim. The good faith defense protects a third-party transferee from having to return the value it received from a debtor as a part of a fraudulent transaction so long as that third-party transferee entered into the transaction with the debtor in good faith.
Equitable subordination in bankruptcy can be a powerful tool, providing a court with considerable latitude to set things right insofar as the estates of the penniless and the rights of their creditors are concerned.
A draft of the U.S. Treasury’s proposed debt restructuring legislation began circulating earlier today. The draft legislation would give Puerto Rico, as well as other U.S. territories, and their municipalities access to U.S. bankruptcy court under a new chapter of the U.S. Bankruptcy Code (so-called “Super Chapter 9”) as well as making Puerto Rico’s instrumentalities (but not Puerto Rico itself) potentially eligible to file for bankruptcy under existing Chapter 9.
On February 17, the Federal Deposit Insurance Corporation (FDIC) approved a proposal for recordkeeping requirements for FDIC-insured institutions with a large number of deposit accounts to facilitate rapid payment of insured deposits to customers if those institutions were to fail. The proposed rule would apply to insured depository institutions with more than 2 million deposit accounts. Under the proposal, these institutions would generally be required to maintain complete and accurate data on each depositor.
Forgot to Get a Court Order Approving a Postpetition Loan? It May Not Matter
Leslie Benedict: “Money isn’t everything, Jett”
Jett Rink: “Not when you’ve got it.”
Giant (1956)
On February 17, the Federal Deposit Insurance Corporation (FDIC) and the Securities and Exchange Commission (SEC) proposed a joint rule that would govern the resolution of large broker-dealers that are designated as “covered financial companies” under the Orderly Liquidation Authority (OLA) provisions (Title II) of the Dodd-Frank Act.
Cases decided recently in Florida and Illinois call into question one legal rule that some might have thought well-settled: a first-perfected security interest in collateral beats a later-perfected lien creditor's interest in that same collateral. Seems simple enough. Except this rule might not be followed in every State.
The confusion over Bitcoin grows in the latest lawsuit brought in a California bankruptcy court by Trustee Mark Kasolas against Marc Lowe, a former employee of HashFast Technologies LLC.
The trustee alleges, among other things, that Lowe received from the bankrupt Bitcoin mining company fraudulent transfers which included 3,000 Bitcoin (“BTC”) in September 2013, valued at approximately $363,861.
On Aug. 4, 2015, in City of Concord, New Hampshire v. Northern New England Telephone Operations LLC (In re Northern New England Telephone Operations LLC), No. 14-3381 (2nd Cir. Aug. 4, 2015), the U.S. Court of Appeals for the Second Circuit addressed the circumstances under which a creditor's lien on the property of a debtor may be extinguished through a Chapter 11 plan of reorganization.