An ongoing development in bankruptcy practice makes it important for credit managers to determine exactly which entity in a corporate group is actually the customer purchasing and paying for goods or services.
On April 25, 2011, as widely expected, a group of Lehman creditors holding claims arising from terminated derivatives transactions filed a competing plan of reorganization and related disclosure statement in the Debtors' chapter 11 cases. As a result of the new filing, there are now three competing plans – (1) the Debtors’ Plan, (2) the Ad Hoc Group’s Plan (filed by a group of bondholder creditors) and (3) the Non-Consolidation Plan (filed by the derivative claimants) - in the Lehman bankruptcy proceedings.
When a company saddled with potential environmental liabilities seeks bankruptcy protection, the goals of Chapter 11—giving the reorganized debtor a “fresh start” and fairly treating similarly situated creditors—can conflict with the goals of environmental laws, such as ensuring that the “polluter pays.” Courts have long struggled to reconcile this tension.
On April 26, 2011, the Supreme Court approved a number of amendments to the Federal Rules of Bankruptcy Procedure. In particular, the Supreme Court amended Bankruptcy Rule 2019 to clarify the disclosure required of certain parties in interest in a chapter 9 or 11 bankruptcy case.1 These amendments were drafted by a panel of bankruptcy judges and restructuring experts and are intended to resolve a split in decisions concerning the proper application of the current Bankruptcy Rule 2019.
Reprinted with permission from the May 6, 2011 issue of The Legal Intelligencer © 2010 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.
Over the last 12 months there has been a substantial increase in the number of preference recovery actions filed. The irony created by the current economic environment is that many such defendants are themselves financially distressed and unable to fully satisfy any judgment that might be rendered against them.
Google stepped closer to acquiring Nortel’s portfolio of 6,000 telecommunications, wireless and Internet patents on Monday as courts in the U.S. and Canada approved the web search giant’s “stalking horse” offer of $900 million for those patents. Announced on April 4, Google’s offer effectively constitutes the opening bid in an auction that will be decided at a joint hearing of the U.S. and Canadian courts on June 30. The auction also opens the latest chapter in the ongoing bankruptcy process for Nortel.
Trustees play a critical role in the bankruptcy process.
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.