“… Ponzi scheme payments to satisfy legitimate antecedent debts to defendant banks could not be avoided” by a bankruptcy trustee “absent transaction-specific proof of actual intent to defraud or the statutory elements of constructive fraud – transfer by an insolvent debtor who did not receive reasonably equivalent value in exchange,” held the U.S. Court of Appeals for the Eighth Circuit on Nov. 20, 2018. Stoebner v. Opportunity Finance LLC, 2018 WL 6055636 at *4 (8th Cir. Nov. 20, 2018), citing Finn v. Alliance Bank, 860 N.W. 2d 638, 653-56 (Minn. 2015).

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. Court of Appeals for the Fifth Circuit held on August 5 that a secured lender’s disputed “lien on [the debtor’s] principal asset survived . . . confirmation of [the debtor’s] Chapter 11 . . . reorganization plan” because the lender had not participated in the bankruptcy case.S. White Transportation, Inc. v. Acceptance Loan Co., 2013 WL 3983343, *1,*3 (5th Cir. Aug. 5, 2013). Had the lender participated in the case, the court reasoned, its lien might have been avoided.Id., at *1, citingIn re Ahern Enterprises, Inc., 507 F.3d 817, 822 (5th Cir.

The United States Bankruptcy Court for the Southern District of New York overseeing the Lehman Brothers (“LBI“) case under the Securities Investor Protection Act (“SIPA“) entered an order on Nov. 7, 2008 (the “Claims Bar Date Order“) establishing the following deadlines for the filing of claims against LBI:

“The right of setoff … allows entities to apply their mutual debts against each other to avoid the pointless exercise of ‘making A pay B when B owes A.’” held the Seventh Circuit on Aug. 17, 2018. Berg v. Social Security Administration, 900 F.3d 864, 868 (7th Cir. 2018). But the Bankruptcy Code (“Code”) limits “a creditor’s right of setoff during the ninety-day period prior to the” date of bankruptcy, said the court. Id.

Insider creditors “waived [the] right to charge default interest on” their claims and “failed to prove” their claim for non-default interest, held the U.S. Bankruptcy Appellate Panel for the Tenth Circuit (“BAP”) on Nov. 6, 2015. In re Autterson, 2015 WL 6789168, at *4 (10th Cir. BAP, Nov. 6, 2015).

The Bank's Restructuring Proposal

The Ninth Circuit held on July 3, 2008, that an oversecured creditor’s claim for payment was entitled to a “presumption in favor of the loan agreement’s default rate (an additional 2% interest), subject only to reduction based upon any equities involved.” General Elec. Capt’l Corp. v. Future Media Productions, Inc., 2008 WL2610459, *2 (9th Cir. 7/3/08). Reversing the lower courts, the Court of Appeals held that the bankruptcy court had improperly applied a questionable Ninth Circuit precedent when denying the lender a default rate of interest. Id., at *4.

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.

“Each litigant [in the U.S. legal system] pays [its] own attorney’s fees, win or lose, unless a statute or contract provides otherwise.” Baker Botts LLP v. ASARCO LLP, 135 S. Ct. 2158, 2164 (2015) (6-3), quoting Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 252-53 (2010). A majority of the U.S.