The Delaware State Legislature recently amended Article IV, section 11 of the Delaware Constitution to add United States Bankruptcy Courts to the expanding list of courts and agencies that may certify questions to the Delaware Supreme Court. The list already included other Delaware courts, the United States Supreme Court, a Court of Appeals of the United States, a United States District Court, the United States Securities and Exchange Commission, or the highest appellate court of any other state. See Del. Const. art. IV, § 11(8).
The opinion by the Delaware bankruptcy court in In re Fisker Auto. Holdings, Inc., raised alarm bells for secured creditors throughout the country. Many worry that it will diminish the valuable right of secured creditors to credit bid, which is the right to bid up to the amount of a secured claim without paying cash.
The OCC has issued guidance to clarify supervisory expectations for national banks and federal savings associations in situations where secured consumer debt is discharged under Chapter 7 bankruptcy proceedings. The guidance issued on February 14 in OCC Bulletin 2014-4 describes the analysis necessary to “clearly demonstrate and document that repayment is likely to occur” to avoid the charge-off that would otherwise be required by the OCC’s Uniform Retail Credit Classification and Account Management Policy.
Recent rulings in the Third Circuit Court of Appeals and the U.S.
Law360, New York (February 25, 2014, 1:26 PM ET) -- In the Chapter 11 bankruptcy of Fisker Automotive Holdings Inc., a manufacturer of hybrid electric vehicles, the U.S. Bankruptcy Court for the District of Delaware recently ruled that the proposed stalking horse purchaser of substantially all of Fisker’s assets in a sale under Section 363 of the Bankruptcy Code was entitled to credit bid only a fraction of its secured claim. In re Fisker Auto. Holdings Inc., No. 13087 (Bankr. D. Del. Jan. 17, 2014) [Docket No. 483].
On January 17, 2014, the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) entered an order in the Fisker Automotive (“Fisker”) chapter 11 bankruptcy cases limiting the ability of Fisker’s secured lender, Hybrid Tech Holdings, LLC (“Hybrid”), to credit bid at an auction for the sale of substantially all of Fisker’s assets.1 Hybrid immediately sought an appeal of the Bankruptcy Court’s
Last week, the 8th Circuit B.A.P. affirmed, first noting that criminal judgments, including restitution awards and liens, are afforded special protection from bankruptcy discharge.
The Court of Appeals for the Sixth Circuit held that no exception exists to Tennessee’s general prohibition on direct actions against an insurer, even in cases where the insured has declared bankruptcy triggering an automatic stay before a judgment in the underlying action. Mauriello v. Great American E&S Insurance Co., 2014 WL 321921 (6th Cir. Jan. 30, 2014). In so holding, the Sixth Circuit reasoned that an adequate remedy remains notwithstanding the automatic stay for a claimant to obtain a judgment against a bankrupt insured.
In Jaffé v. Samsung Electronics Company, Limited,1 a Court of Appeals protected the rights of cross- licensees of a German debtor’s American patents by applying the U.S. Bankruptcy Code, instead of inconsistent German law. Specifically, in Chapter 15 U.S. bankruptcy proceedings ancillary to German insolvency proceedings, the administrator notified certain cross-licensees of the debtor’s patents that their cross-licenses were not enforceable under German law. The cross-licensees argued that under U.S. law, they had the option to retain their rights under the cross-licenses.