On August 2, 2016, Judge Brendan L. Shannon of the Delaware Bankruptcy Court issued an opinion (the “Opinion”) in the Refco Public Commodity Pool, L.P. bankruptcy, Case No. 14-11216. A copy of the Opinion is available here. The Opinion holds that this Debtor’s failure to file its taxes was due to reasonable cause, and the associated tax penalties are, therefor, claims that can be excused and disallowed.
So, a ruling came out in June that we in The Bankruptcy Cave have been dying to blog about (and not just so we can use the blog title above). Forgive the delay – heavy workloads and summer vacations often preclude timely blog posts. But this one is a doozy, better late than never on this blog post.
A recent decision out of the Southern District of Georgia shows the collateral impact of the Crawfordv. LVNV Funding proof of claim decision issued by the Eleventh Circuit.
Section 546(e) of the bankruptcy code prohibits a bankruptcy trustee from avoiding “settlement payment[s]”, or payments “made in connection with a securities contract,” that are “made by or to (or for the benefit of)” qualifying financial entities, including financial institutions, stockbrokers, commodities brokers and others.
A Chapter 11 debtor’s financial advisers were entitled to a “Success Fee” based on a percentage of a $50-million “debt-to-equity conversion,” held a split U.S. Court of Appeals for the Fifth Circuit on May 4, 2016. In re Valence Technology, Inc., 2016 WL 2587109, *1 (5th Cir. May 4, 2016) (2-1). Key to the opinion was the parties’ concession that the “debt-to-equity conversion qualified as a Private Placement under [their] engagement agreements.” Id., at n.1.
In FTI Consulting, Inc. v. Merit Management Group, LP,1 the Seventh Circuit recently held that transfers are not protected under the safe harbor of section 546(e) of the U.S.
In 2014 the Eleventh Circuit held that a debt collector violates the Fair Debt Collections Practices Act when it filed a proof of claim in a chapter 13 case on a debt that it knows to be time-barred. Crawford v. LVNV Funding, LLC, 758 F.3d 1254 (11th Circ. 2014).
Two recent cases serve as reminders the devil is truly in the details.
The Missouri Commercial Receivership Act (MCRA), passed by the Missouri legislature and just signed into law by Governor Nixon, becomes effective Aug. 28, 2016. It expands, clarifies and fleshes out the existing minimal receivership statute. The MCRA (Sections 515.500 through 515.665 of MO Senate Bill No. 578) outlines a new standardized system for receivership administration under the auspices of the Missouri courts.
Recent Developments in Bankruptcy Law, July 2016 (Covering cases reported through 550 B.R. 151 and 822 F.3d 451) RICHARD LEVIN Partner +1 (212) 891-1601 [email protected] © Copyright 2016 Jenner & Block LLP. 353 North Clark Street Chicago, IL 60654-3456. Jenner & Block is an Illinois Limited Liability Partnership including professional corporations. Attorney Advertising. Prior results do not guarantee a similar outcome.