The United States Court of Appeals for the Second Circuit recently vacated a decision by the District Court for the Southern District of New York, which had declined to enforce the contractual allocation of claim impairment risk between a bankruptcy claim buyer and its seller.[1] Relying on the plain language of the documents, the Second Circuit held in Longacre Master Fund, Ltd. v. ATS Automation Tooling Systems Inc. (Longacre)that the debtors’ objection to the claims had triggered the seller’s repurchase obligation.
On July 25, 2012, the Third Circuit issued its decision in In re American Capital Equipment LLC and Skinner Engine Co., 688 F.3d 145 (3rd Cir. 2012), becoming the first circuit court to align itself with numerous district courts that have allowed bankruptcy courts to reject a Chapter 11 plan prior to a confirmation hearing.
Stephens Media, LLC is the publisher of the Las Vegas Review-Journal. In 2009, Stephens Media filed a lawsuit in the U.S. District Court against Citihealth, L.L.C. alleging a variety of trademark related claims. Citihealth failed to respond to the suit and Stephens Media filed a motion for a default judgment. One of the co-owners of Citihealth then notified the court that Citihealth had dissolved and that he and the other co-owner filed for personal bankruptcy. In ruling on the motion, U.S.
Decisions in two recent cases raise concerns for those interested in buying assets out of bankruptcy.
Earlier this week, George L.
This week, Edward Gavin, the liquidating trustee (the "Trustee") for the Ultimate Escapes bankruptcy, filed preference complaints against several defendants. Under the complaints, the Trustee alleges that the defendants received preferential transfers that are avoidable under 11 U.S.C. section 547 of the Bankruptcy Code. For those unfamiliar with this bankruptcy proceeding, Ultimate Escapes ("Ultimate" or the "Debtor") filed petitions for bankruptcy in the Delaware Bankruptcy Court on September 20, 2010.
To successfully reorganize in Chapter 11, a bankrupt company may need to retain key employees who understand the company’s business and who can design and implement the company’s reorganization plan. Retaining and properly incentivizing these employees during a Chapter 11 case can be challenging for a number of reasons.
In 2012, several judicial opinions have reminded directors, officers and “responsible persons” that personal liability may be imposed for business taxes. See our alert from June 20, 2012. Responsible persons are reminded again that not only will authorities impose liability for unpaid taxes of a business on individuals but that the imposition of such taxes may not be dischargeable in bankruptcy.
Jeffrey Marks, a partner in the Vorys Cincinnati office and a member of the commercial and finance group, authored this column about the decision from U.S. Court of Appeals for the Sixth Circuit in Onkyo Electronics V. Global Technovations. The column originally appeared in the September 17, 2012 edition of Bankruptcy Law360.
Case Study: Onkyo Electronics V. Global Technovations