On May 4, 2015, the United States Supreme Court unanimously held in Bullard v. Blue Hills Bank, Case No. 14-115, that a bankruptcy court’s order denying confirmation of a debtor’s proposed plan is not a “final” order that can be immediately appealed. The Supreme Court’s decision implicates practical considerations within the bankruptcy process and the appropriate balance between the bargaining power of debtors and creditors
Case Summary
In re Primes, 518 B.R. 466 (Bankr. N.D. Ill. 2014) –
A mortgagee moved for relief from the automatic stay, arguing that it acquired title to property prior to the bankruptcy under a quit claim deed given to it by the debtor. However, the bankruptcy court agreed with the debtor that the deed, which was given in connection with a forbearance agreement, should be treated as an equitable mortgage.
On June 1, 2015, the United States Supreme Court in Bank of America, N.A. v. Caulkett, 575 U.S. ____ (2015), unanimously held that a Chapter 7 debtor cannot strip off wholly “underwater” liens secured by the debtor’s property. In Caulkett, the debtor’s property was subject to two liens when the bankruptcy case was commenced. Since the obligation owed on the first lien exceeded the value of the property, the second lien was underwater and therefore had no value.
In a victory for secured lenders, the U.S. Supreme Court has ruled that a bankruptcy court may not extinguish a junior lien on a Chapter 7 debtor's property, even though the collateral has no value above the senior debt.
Yesterday the United States Supreme Court, in Bank of America v.
On June 1st, the Supreme Court of the United States released an opinion which settles a controversy in the lower courts over lien stripping in Chapter 7 bankruptcy cases. With Bank of America, N.A. v.
No matter your industry or line of business, insolvency is not a pleasant process. Debts stack up, paperwork starts flying back and forth, and creditors circle their wagons. But it may surprise even a seasoned corporate attorney when one debtor in particular comes calling: The federal government.
The law that makes it possible — and pushes Uncle Sam to the front of the creditor line — is the Federal Priority Act. The statute dates back centuries, but is little-known among today’s practitioners. And that’s not a good thing.
Section 506(a) of the Bankruptcy Code provides that a creditor’s claim is a “secured claim to the extent of the value of such creditor’s interest in the estate’s interest in such property”—that is, it is a secured claim for an amount equal to the present value of the collateral—and is an “unsecured claim” for the remainder. Section 506(d) provides that, “[t]o the extent that a lien secures a claim against the debtor that is not an allowed secured claim, such lien is void.”
The Nutter Bank Report is a monthly electronic publication of the firm’s Banking and Financial Services Group and contains regulatory and legal updates with expert commentary from our banking attorneys.
Whether a provision in a bond indenture or loan agreement obligating a borrower to pay a “make-whole” premium is enforceable in bankruptcy has been the subject of heated debate in recent years. A Delaware bankruptcy court recently weighed in on the issue in Del. Trust Co. v. Energy Future Intermediate Holding Co. LLC (In re Energy Future Holdings Corp.), 527 B.R. 178 (Bankr. D. Del. 2015).