Judges Kevin Carey and Mary Walrath of the United States Bankruptcy Court for the District of Delaware issued opinions in In re Tribune Co.1 and In re JER/Jameson Mezz Borrower II, LLC2, respectively, that shake up the landscape for restructuring real estate investments with multiple layers of debt.
In the case of In re Santa Ysabel Resort and Casino, the Bankruptcy Court for the Southern District of California heard arguments on September 4, 2012, as to whether the alleged debtor, a tribal casino, was eligible for bankruptcy protection. The court concluded the casino was not an eligible debtor under the Bankruptcy Code.
The Second Circuit Court of Appeals recently heard arguments in a case that could have substantial implications on the trading of bankruptcy claims. While the court could choose to resolve the case, Longacre Master Fund, Ltd. v.
A Georgia bankruptcy court has held that notwithstanding the discharge of an individual in his individual bankruptcy proceeding, the Federal Deposit Insurance Corporation (FDIC) may file suit against the individual as a former officer of a failed bank so long as the applicable D&O policy covers defense costs and the FDIC’s recovery is limited to insurance proceeds. In re Hayden, 2012 WL 3597422 (Bankr. N.D. Ga. July 6, 2012).
Pursuant to Bankruptcy Code § 363(f), a bankruptcy judge may authorize the sale of a debtor’s assets free and clear of liens, claims, and interests. This is meant to allow a buyer to acquire assets without the risk of future claims being asserted with respect to the purchased assets and to maximize the value of a debtors assets, thereby maximizing creditors' recovery.
In a recent decision authored by Chief Judge Easterbrook, the United States Court of Appeals for the Seventh Circuit (Sunbeam Products, Inc. v. Chicago American Manufacturing, LLC, Docket No. 11-3920 (7th Cir. July 9, 2012)) held that the licensee of a trademark does not necessarily lose the right to use the licensed marks when a debtor-licensor rejects the underlying license agreement in its bankruptcy case. In so holding, the Court rejected a contrary decision reached by the United States Court of Appeals for the Fourth Circuit in Lubrizol Enterprises, Inc. v.
Federal Rule of Bankruptcy Procedure 3003(c)(3) provides that "the [bankruptcy] court shall fix and for cause shown may extend the time within which proofs of claim or interest may be filed." For various reasons, creditors sometimes miss the claims "bar date" and need to seek permission from the court to file a late filed claim or deem the late-filed claim allowed. In order to succeed, the creditor must convince the court that the late claim was the result of excusable neglect. In re Garden Ridge Corp., 348 B.R. 642, 645 (Bankr. D. Del.
On August 20th, the U.S. Court of Appeals for the Tenth Circuit reversed a trial court's ruling finding that judgments against Ponzi scheme "net gainers" were non-dischargeable in bankruptcy. The debtors were early investors in what turned out to be a Ponzi scheme and received more money than they invested. When the Ponzi scheme was uncovered, the state State of Oklahoma sued the debtors for unjust enrichment but not for any securities violations. After the State obtained a judgment on the unjust enrichment claim, the debtors declared bankruptcy.
On August, 15, 2012, Bankruptcy Judge Sean H. Lane of the Southern District of New York denied American’s motion to reject its collective bargaining agreement with the Allied Pilots Association (“APA”) on narrow grounds. The Court held that American had not demonstrated that its proposals to eliminate contractual restrictions on pilot furloughs and enter into essentially unlimited codesharing arrangements were necessary to its reorganization.
In Re Loucheschi LLC, 471 B.R. 777 (Bankr. D. Mass 2012) –
When a lender makes a loan that does not comply with usury laws it runs a risk that not only will interest and charges be disallowed, but also the entire loan may be declared void. In cases where declaring a usurious loan void is discretionary, one might expect a bankruptcy court to be inclined to do so since it could benefit the bankruptcy estate.