Summary
In a 5 page decision signed May 4, 2011, Judge Walsh of the Delaware Bankruptcy Court held that a proceeding initiated by a Debtor, seeking contribution relating to environmental claims is non-core. Judge Walsh’s opinion is available here (the “Opinion”).
Background
Summary
In a 28 page decision signed April 29, 2011, Judge Gross of the Delaware Bankruptcy Court determined that in order for a transfer to be considered “substantially contemporaneous” as used by Bankruptcy Code §547(c), it does not necessarily need to comply with the timing requirements of §547(e). Judge Gross’s opinion is available here (the “Opinion”).
Background
On April 26, 2011, the Supreme Court of the United States adopted amended Federal Rule of Bankruptcy Procedure 2019 (“Rule 2019”). Rule 2019 governs disclosure requirements for groups and committees that consist of or represent multiple creditors or equity security holders, as well as lawyers and other entities that represent multiple creditors or equity security holders, acting in concert in a chapter 9 or chapter 11 bankruptcy case.
U.S. federal courts have frequently been referred to as the “guardians of the Constitution.” Under Article III of the Constitution, federal judges are appointed for life by the U.S. president with the approval of the Senate. They can be removed from office only through impeachment and conviction by Congress. The first bill considered by the U.S. Senate—the Judiciary Act of 1789—divided the U.S. into what eventually became 12 judicial “circuits.” In addition, the court system is divided geographically into 94 “districts” throughout the U.S.
We've all heard of Chapter 7 and Chapter 11 of the Bankruptcy Code, but what is Chapter 9? Chapter 9 provides a municipality protection from its creditors while it develops a plan to resolve or adjust its debts. Adjustment of a municipality's debt involves refinancing such debts to (i) extend the time to pay debt obligations or (ii) reduce the amount of interest on such obligations.
In chapter 11 bankruptcy cases, creditors and equity holders with common interests often find it advantageous to pool resources and form an ad hoc group or committee. Because the committee represents a larger amount of claims or interests, it speaks with more authority in the bankruptcy case, and the members are able to save money by sharing the cost of legal and financial advisors.
In a recent decision arising out of the Chapter 11 bankruptcy case of Global Industrial Technologies, Inc. (GIT),1 the U.S. Court of Appeals for the Third Circuit, sitting en banc, held that insurance companies that had issued liability insurance policies to a manufacturer before its bankruptcy filing had standing to object to confirmation of the company’s Chapter 11 plan of reorganization, even though the plan had been designed to be “insurance neutral” with regard to the policies.
A recent bankruptcy case in Pennsylvania,In re Shubh Hotels Pittsburgh, LLC, 439 B.R. 637 (Bankr. W.D. Pa. 2010), held that as long as the “debtor-in-possession” exercises its sound business judgment when making its decision, the “debtor-in-possession” can enter into a new 15-year franchise agreement over the objection of the secured lender.
Summary
In a 10 page decision signed May 5, 2011, Judge Walsh of the Delaware Bankruptcy Court denied a motion to dismiss and held that the plaintiff Litigation Trustee satisfied the “particularity” requirements of Federal Rules of Civil Procedure 12(b)(6) and 9(b), despite having his complaint allege that each transfer within a 13 page list of transfers was fraudulent. Judge Walsh’s opinion is available here (the “Opinion”).
On April 27, 2011, the United States Supreme Court approved certain amendments to Bankruptcy Rule 2019 requiring disclosures by certain creditors and equity holders in Chapter 11 cases. We expect that amended Rule 20191 (“Amended Rule 2019”) will take effect as a matter of law on December 1, 2011 unless in the interim Congress enacts legislation to reject, modify, or defer the rules, which we view as unlikely.