SeaStar Holdings, Inc., along with two of its subsidiaries and affiliates, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-10039). SeaStar operates a passenger airline based in San Juan, Puerto Rico under the name Seaborne Airlines.

Rentech WP U.S., Inc. (NASDAQ: RTKH) and an affiliate have filed chapter 11 petitions before the United States Bankruptcy Court for the District of Delaware (Lead Case No. 17-12958). The cases have been assigned to the Honorable Christopher S. Sontchi. Through its wholly owned subsidiary, Fulghum Fibres, Rentech offers a full range of integrated fibre services including, wood chipping, operations, marketing, trading and vessel loading.

Certain amendments to the Federal Rules of Bankruptcy Procedure, which became effective on December 1, 2017, impose affirmative obligations on secured creditors to protect the right to distribution in a bankruptcy case. Specifically, Rule 3002(a) now requires a secured creditor to file a proof of claim in order to gain allowance for a secured claim.

Bankruptcy courts lack the power to impose serious punitive sanctions, a federal district judge ruled recently in PHH Mortgage Corporation v. Sensenich, 2017 U.S. Dist. LEXIS 207801 (D. Vt. Dec. 18, 2018). Judge Geoffrey Crawford reversed a bankruptcy judge’s ruling that had imposed sanctions against a creditor based on Rule 3002.1(i) of the Rules of Bankruptcy Procedure, the bankruptcy court’s inherent authority, and Bankruptcy Code section 105.

The Second Circuit recently issued its decision on an appeal to the Momentive Performance Materials Inc. (“MPM”) bankruptcy case. Amongst other issues, the Court found that when determining the appropriate interest rate in a Chapter 11 cramdown, courts should consider market factors rather than strictly apply the Till formula. The Court’s decision will benefit secured creditors when a market rate is ascertainable, as they will no longer have to accept below-market take-back debt.

The Delaware Bankruptcy Court recently authorized the sale of La Paloma’s electricity-generating assets “free and clear” of any obligations to surrender compliance certificates under California’s Cap-and-Trade Program. The ruling confirms the viability of Bankruptcy Code section 363 sales as a mechanism to release energy-related assets from certain ongoing environmental obligations.

Boston Herald, Inc., along with three affiliates and subsidiaries, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 17-12883). The Herald’s Petition estimates both its assets and liabilities to be between $10 – $50 million.

Numerous changes to the Federal Rules of Bankruptcy Procedure (the “Rules”) take effect on December 1, 2017. The changes significantly impact the administration of consumer bankruptcy cases, and Chapter 13 cases in particular.

Some of the most significant changes to affect creditors, explained in more detail below, include:

(B.A.P. 6th Cir. Nov. 28, 2017)

The Sixth Circuit B.A.P. affirms the bankruptcy court’s dismissal of the Chapter 12 bankruptcy case. The court finds that the bankruptcy court failed to give the debtor proper notice and opportunity to be heard prior to the dismissal. However, the violation of due process was harmless error. The delay in filing a confirmable plan and continuing loss to the estate warranted the dismissal. Opinion below.

Judge: Preston

Attorney for Appellant: Heather McKeever

The Woodbridge Group of Companies, LLC, a real estate finance and development company based in Sherman Oaks, CA, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware, along with two hundred and seventy five subsidiaries and affiliates (Lead Case No. 17-12560).