Companies that plan to sell goods or services to a debtor in bankruptcy should be aware of a recent case decided by the Court of Appeals for the Eleventh Circuit, holding that a trustee may avoid a debtor’s post-petition transfers of cash collateral if such transfers were made without the consent of the secured party or court order.1
On June 2, 2010, the Third Circuit overruled longstanding precedent interpreting the definition of a “claim” under the Bankruptcy Code. In JELD-WEN, Inc. v. Van Brunt (In re Grossman’s Inc.), No. 09-1563, slip op., (3d Cir. June 2, 2010) an en banc panel rejected the state law accrual theory of claims recognition established in Avellino & Bienes v. M. Frenville Co. (Matter of M. Frenville Co.), 744 F.2d 332 (3d Cir. 1984), in favor of the more widely followed conduct test theory.
The US District Court for the District of Connecticut recently dismissed a customer suit against an insurer, based upon its determination that all of the underlying claims were excluded by the policy’s Insolvency Exclusion.1 Associated Community Bancorp, Inc., et al. v. The Travelers Companies, Inc., et al.
Under BAPCPA, enacted in 2005, a Bankruptcy Court may not approve a Chapter 13 plan which does not provide for the payment of all unsecured claims in full if the plan does not devote all of the debtor’s projected disposable income over the life of the plan to repayment of the unsecured creditors.
On June 7th, the US Supreme Court addressed the calculation of a Chapter 13 debtor's projected "disposable income" under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. When a bankruptcy court calculates a debtor's projected disposable income, the court may account for changes in the debtor's income or expenses that are known or virtually certain at the time of confirmation. Hamilton v. Lanning.
The Texas Rangers filed for bankruptcy relief in late May, 2010, to break an impasse between the club and its bank lenders, who are owed approximately $550 million and who oppose a planned sale to a group led by Nolan Ryan. The Rangers are owned by Hicks Sports Group, which acquired the club in 1998 and had guaranteed the debt.
A. United States v. Delfasco, Inc., 409 B.R. 704 (D. Del. July 15, 2009).
This suit involved a motion to withdraw from Bankruptcy Court to District Court. Defendant/Debtor Delfasco, Inc. (“Delfasco”) filed for Chapter 11 protection under the Bankruptcy Code following the EPA’s issuance of a RCRA Order requiring Delfasco to install and maintain mitigation systems for trichloroethylene that it discovered on its property. The United States, on behalf of the EPA, filed an Adversary Complaint against Delfasco, followed by this motion to withdraw.
In our Distressed Investor Alert dated December 23, 2009, we wrote that Bankruptcy Rule 2019, an often ignored procedural rule in U.S. bankruptcies, had returned to the public eye in light of the controversial revisions to Rule 2019 (“Revised Rule 2019”)1 proposed by the Committee on Rules of Practice and Procedure of the Judicial Conference of the United States (the "Rules Committee").
St. Mary's Hospital is the first hospital in New Jersey to emerge from Chapter 11 bankruptcy and did so in less than one year. Since 2007, six hospitals have filed for bankruptcy, five of which have either closed or sold their assets in bankruptcy.
The United States Court of Appeals for the Third Circuit on June 2, 2010, sitting en banc, overruled its own precedential holding in Avellino & Beines v. M. Frenville Co. (Frenville), 744 F.2d 332 (3d Cir. 1984), to hold that in the context of asbestos-related tort claims, a “claim” under the Bankruptcy Code arises when an individual is exposed pre-petition to a product giving rise to an injury rather than when the injury manifests itself. JED-WEN, Inc. v. Van Brunt (In re Grossman’s), No. 1563, slip op. at 18 (3d Cir. June 2, 2010).