On May 30, 2014, hedge fund Moore Capital (Moore) brought suit against the Lehman Brothers bankruptcy estate (Lehman) in the Southern District of New York bankruptcy court, seeking a declaratory judgment that it acted properly when it terminated swap agreements and setoff termination amounts in the time between the filing of the parent company Lehman Brothers Holdings Inc. (LBHI) and the eve of bankruptcy filings weeks later of Moore’s Lehman counterparties1.
On March 3, the DOJ’s U.S. Trustee Program announced a $50 million settlement with a national bank to resolve allegations that the bank engaged in improper actions during bankruptcy proceedings.
Debtors seeking dismissal of an involuntary bankruptcy proceeding may want to consider a recent decision of the Bankruptcy Court for the District of Columbia. In denying an individual debtor’s motion to dismiss an involuntary petition, the court in In re Barkats held that a debtor may not pay off petitioning creditors to the detriment of other creditors as a way of avoiding an involuntary p
Most bankruptcy lawyers might think that the dismissal of a bankruptcy proceeding and the revesting of the bankruptcy estate’s assets in the debtor bring an end to the bankruptcy court’s jurisdiction.
A recent bankruptcy decision from the Southern District of New York should caution business partners about the risks presented if the partnership becomes bankrupt. Limited liability partnerships present advantages such as flexibility in the operation of the business and tax advantages. LLPs also provide protection for partners from the business’ debts. As a result, LLPs are popular among professionals, including attorneys.
The “discharge injunction” of Section 524 of the Bankruptcy Code is one of the most, if not the most, important features of United States bankruptcy law. Debtors in bankruptcy must complete detailed paperwork regarding their assets and liabilities and either turn over their non-exempt assets to a bankruptcy trustee or execute a payment plan that repays all or a portion of their debt.
A bankruptcy remote entity is a special-purpose vehicle (or special purpose entity) (“SPV”) that is formed to hold a defined group of assets and to protect them from being administered as property of a bankruptcy estate. SeePaloian v. LaSalle Bank Nat’l Assn (In re Doctors Hospital of Hyde Park, Inc.), 507 B.R. 558, 701, 702 (N.D. Ill. 2013). Bankruptcy remote entities are intended to separate the credit quality of assets upon which financing is based from the credit and bankruptcy risks of the entities involved in the financing. See id.
In a February 4, 2015 opinion, the bankruptcy judge presiding over Stockton, California's Chapter 9 municipal bankruptcy case approved Stockton's bankruptcy plan of adjustment.