A group of retired employees filed a class-action law suit claiming loss of certain retirement benefits. The employees worked for SPX Corporation until 1996 when it was acquired by Dana Corporation. SPX sponsored a pension plan for these employees. In 2006, Dana filed a Chapter 11 bankruptcy and sold certain assets to Mahle gmbH. Under the asset purchase agreement, Mahle assumed certain benefit plans. The dispute arises over eligibility for supplemental retirement benefits under a plan Mahle assumed from Dana.

Part Two of a Two-Part Article

Last month, we discussed “prepayment premiums” or “make-whole payments.” The purpose of such prepayment premiums is to compensate lenders for what would otherwise be the loss of their bargained-for yields for the scheduled lives of their loans. Prepayment premiums are usually either based on a fixed fee, such as a percentage of the principal balance at the time of prepayment, or a yield maintenance formula that approximates the lenders’ damages in the event of prepayment.

TheLehman Brothers bankruptcy court has determined that the contractually specified methodology for conducting the liquidation of a swap agreement is protected by the safe harbor provisions of the bankruptcy, even if the selected methodology would be more favorable to the non-defaulting counterparty than the liquidation methodology that would apply absent the bankruptcy.See Michigan State Housing Dev. Auth. v. Lehman Bros. Deriv. Prods. Inc. (In re Lehman Bros. Holdings Inc.), No. 08-13555, ---B.R.

On December 5, 2013, Judge Steven Rhodes of the US Bankruptcy Court for the Eastern District of Michigan held that the city of Detroit had satisfied the five expressly delineated eligibility requirements for filing under Chapter 9 of the US Bankruptcy Code¹ and so could proceed with its bankruptcy case.

The Michigan judge overseeing Detroit’s historic bankruptcy case found today that parties seeking to appeal his order finding the city eligible for bankruptcy protection may proceed directly to the Sixth Circuit.

One of the effects of commercial globalization is that the bankruptcy filing of a debtor with transnational business relationships will sometimes result in a clash between the substantive bankruptcy laws of different countries.  A frequent question is whether the bankruptcy laws of a foreign country should be brought to bear upon creditors located in the United States, even where foreign bankruptcy law is at odds with the laws of the United States. 

On Tuesday, December 2, 2013, Judge Steven Rhodes of the Eastern District of Michigan ruled that the City of Detroit, which filed for Chapter 9 bankruptcy protection in the U.S. Bankruptcy Court on July 18, 2013, met the specific legal criteria required to receive protection from its creditors and thus could formally enter bankruptcy.  The district court further determined that the city’s obligation to pay pensions in full was not "untouchable" while working and negotiating with creditors in restructuring its debt.

Would you know what to do if you learned that one of your franchisees had filed for bankruptcy? Perhaps more importantly, would you know what not to do? While each circumstance and franchise agreement is different, there is a general framework for dealing with a franchisee in bankruptcy. Here we’ll introduce some of the issues you are likely to encounter throughout the bankruptcy process.

The Automatic Stay

On December 5, 2013, the U.S. Bankruptcy Court for the Eastern District of Michigan released its 143 page decision upholding the City of Detroit’s eligibility to be a debtor under chapter 9 of the United States Bankruptcy Code.  In re City of Detroit, Michigan, Case No. 13-53846 (Bankr. E.D. Mich. Dec.

A recent Third Circuit reversal paves the way for Fair Debt Collection Practices Act (FDCPA) lawsuits based on minor procedural mishaps in bankruptcy court. This contradicts the law in the Second and Ninth Circuits and in many district and bankruptcy courts that previously have found that participation in bankruptcy proceedings is not an attempt to collect a debt and thus not grounds for an FDCPA claim.