In Schwab v. Reilly, the United States Supreme Court recently reversed a decision from the 3rd Circuit Court of Appeals regarding the need for a bankruptcy trustee to lodge an objection to an exemption where the property is actually worth more than the amount claimed by the exemption. The Supreme Court took the opportunity in this case to also clarify its prior ruling in Taylor v.

What is an inherited IRA? It is the IRA a non-spouse beneficiary receives upon the death of the IRA holder. Unlike a spousal beneficiary, the non-spouse beneficiary must maintain an inherited IRA in the name of the decedent for the benefit of the beneficiary. What is at stake? When the beneficiary files for bankruptcy protection, are the assets of the inherited IRA part of the bankruptcy estate and available to pay claims of creditors? Or is the inherited IRA exempt from the bankruptcy estate and free from creditor claims? Recent court cases have differing answers.

As Dr. Seuss once famously wrote (Marvin K. Mooney, Will You Please Go Now), “THE TIME HAS COME, THE TIME IS NOW”. Good faith efforts to bargain with Chapter 9 of the Bankruptcy Code in the foreground must begin now if we want to emerge from this financial crisis.  

In a recent decision in the Chapter 11 case of Project Orange Associates, LLC1, the court confronted an important issue that often arises in bankruptcy cases: whether the use of conflicts counsel is sufficient to permit court approval under section 327(a) of the Bankruptcy Code of a debtor’s choice for general bankruptcy counsel that also represents an important creditor of the debtor in unrelated matters. Here, the conflict involved the debtor's largest unsecured creditor and an essential supplier.

In re Lehman Brothers Holdings, Inc., Case No. 08-13555 et seq. (JMP)(jointly administered)

In this US decision, the Bankruptcy Court held that the "safe harbour" protections of the US Bankruptcy Code only protect a non-defaulting party's right to liquidate, terminate or accelerate a swap, to offset and to net termination values and payment amounts and to foreclose on collateral, but do not permit the withholding of performance under a swap if the swap is not terminated.

In a recent decision, SEC v Byers,1 the Second Circuit Court of Appeals held that district courts possess the authority and discretion to bar the filing of involuntary bankruptcy petitions without the district court’s permission.

Reversing both the bankruptcy court and the district court, the U.S. Court of Appeals for the Third Circuit held that a trademark licensing agreement had been substantially performed and was therefore not subject to rejection under §365(a) of the Bankruptcy Code. In re Exide Technologies, Case No. 08-1872 (3d Cir., June 1, 2010) (Roth, J.) (Ambro, J., concurring).

On April 20, 2010, an explosion on the Deepwater Horizon oil drilling rig located off the coast of Louisiana killed eleven crewmen and set off what is now considered the largest offshore oil spill in U.S. history. As a result, BP p.l.c. (“BP”), the parent company of the British Petroleum multinational corporation, faces mounting liabilities related to the damages caused by the disaster and hundreds of lawsuits that have been filed in numerous U.S. state and federal courts.

Chapter 11 of the United States Bankruptcy Code is intended to allow financially stressed debtors to restructure their debt obligations through a plan of reorganization. Typically, a Chapter 11 plan places different types of claims in different classes and, subject to various requirements of the Bankruptcy Code, allows the debtor to pay only portions of the claims (and in certain circumstances not to pay certain claims at all). Moreover, the Bankruptcy Code allows a debtor the flexibility to structure a plan to defer the payment of certain claims.

In the case of In re: Exide Technologies, decided on June 1, 2010, the US Court of Appeals for the Third Circuit reversed two lower court decisions and held that a 1991 agreement between Exide Technologies and EnerSys Delaware Inc., which included a license to EnerSys for use of the “EXIDE” trademark, is not an executory contract that can be rejected by Exide in bankruptcy proceedings.