In Venture Bank v. Lapides, 800 F.3d 442 (8th Cir. 2015), the Eighth Circuit found that a bank could not recover from its borrower and, in fact, had violated the post-discharge injunction by relying on change in terms agreements which were ineffective to reaffirm a debt discharged in the borrower’s Chapter 7 bankruptcy.
Precipitous commodity price declines that began in mid-2014 continued to disrupt the oil and gas industry in 2015, outlasting the expectations of many analysts. By the end of 2015, prices for both Brent and WTI crude were fluctuating in the mid to upper $30s per barrel, down from highs of over $100 a barrel in mid-2014.
Case #1. An equipment lease or a disguised financing?
Lyon Fin. Servs., Inc. v. Illinois Paper and Copier Co.
US District Court, Northern District of Illinois, Eastern Division
2015 U.S. Dist. Lexis 169946 (December 21, 2015)
Background
A federal appeals court in Illinois held that Bank of New York Mellon Corporation and Bank of New York (collectively, “BNYM”) were on “inquiry notice” that Sentinel Management Group, Inc. improperly used customer funds as collateral for a loan prior to the firm’s collapse in August 2007. (Sentinel was an investment management firm registered with the Commodity Futures Trading Commission as a futures commission merchant that claimed it specialized in short-term cash management for hedge funds, individuals, financial institutions and other FCMs.
Oil and gas price volatility is as much a part of the energy business as drill bits. Few predicted that the current down-cycle would be as long or as deep as it is proving to be. While global events could turn and prices improve, lower prices seem to be a reality for now. Lower prices impact the finances of everyone in the energy industry. Insolvencies, business failures, and bankruptcies are inevitable in this environment; and when they occur, they affect everyone, at all levels and in all aspects of the industry.
On December 22, New York AG Schneiderman announced that more than 3,000 consumers received partial compensation from funds stemming from a global settlement negotiated by AG Schneiderman and the CFPB.
On December 14, 2015, the United States Court of Appeals for the Second Circuit held that claims arising from securities of a debtor’s affiliate must be subordinated to all claims or interests senior or equal to claims of the same type as the underlying securities in the bankruptcy proceeding.
Owners of small business entities are frequently required to guaranty the debts of such entities. Those business entities might later file for Chapter 11, and may be able to achieve confirmation of a plan to restructure their indebtedness. The question then presented is whether this confirmation event affects the separate guaranty obligations of the owners? The Tenth Circuit Court of Appeals recently explored this issue in In re: Larry
A secured lender had to “pay the [encumbered] Property’s maintenance expenses incurred while the [bankruptcy] trustee was trying to sell the Property,” held the U.S. Court of Appeals for the Fifth Circuit on Dec. 29, 2015. In re Domistyle, Inc., 2015 WL 9487732, at *1 (5th Cir. Dec. 29, 2015).
The U.S. Bankruptcy Court for the Middle District of Florida recently held that: