The recently decided case of RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 566 U.S. ____ (2012), puts to rest a conflict among the Third, Fifth, and Seventh Circuits as to the right of secured creditors to credit bid at a proposed sale of their collateral under a plan of reorganization that the secured creditor opposes. The practice of credit bidding is codified in the Bankruptcy Code at 11 U.S.C. §363(k) and is the right of a secured creditor to bid the amount of its secured debt at a debtor’s sale of the creditor’s collateral in bankruptcy.

On May 15, 2012, the Eleventh Circuit Court of Appeals issued a fraudulent transfer ruling in TOUSA, Inc.'s chapter 11 case with wide-ranging implications for the financing community. As discussed herein, this decision weakens protections for secured lenders, especially when extending credit to distressed borrowers.

Where an insured has assigned away its rights to recover available insurance, the insured’s “empty shoes” do not necessarily prevent an excess carrier that pays defense costs rightfully owed by primary carriers from pursuing the primary carriers based a contractual subrogation theory.  An excess carrier proceeding on this basis typically “stands in the shoes of the insured,” obtaining only those rights held by the insured.  Nonetheless, the Fifth Circuit Court of Appeals found last week that where an excess carrier picks up the bill for an insured’s defense, it may recover fr

On May 29, 2012, the United States Supreme Court issued its decision in RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 566 U.S. ___ (2012), which affirmed that secured creditors have the right to use their claims to credit bid in auctions of their collateral conducted under bankruptcy reorganization plans. The decision is a victory for secured lenders because these credit bid rights ensure that, in the context of a collateral sale, secured lenders will be able to use their claims to purchase their collateral if they are not being repaid in full.

In the recent case of RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 2012 WL 1912197 (May 29, 2012), the Supreme Court in a unanimous 8-0 opinion, delivered by Justice Scalia, held that the Bankruptcy Code statutory scheme mandates that secured creditors must be allowed to credit-bid in 363 sales of assets where the sale is incorporated into a plan of reorganization.

The recent bankruptcy case of Hostess has centered on Hostess’s attempts to reject collective bargaining agreements with its unions.  Hostess has emphasized that realigning labor costs is essential to its ability to successfully reorganize.  Section 1113 of the Bankruptcy Code sets forth detailed requirements that a debtor must meet to modify or reject CBAs.  Bankruptcy courts’ ultimate decision to authorize rejection of a CBA frequently turns on a detailed examination of the evidence presented in support of the rejection motion.

Recent technological innovations and advancements in drilling and completion techniques have led to an unprecedented expansion of natural gas production by large and midsize exploration and production companies. This expansion created competition for wild cat acreage as well as producing properties, putting lessors and co-owners (the “non-operators”) at a distinct advantage in negotiating the terms of leases, farmout agreements and joint operating agreements (“JOAs”).

On April 23, 2012, the U.S. Supreme Court approved amendments to the Federal Rules of Bankruptcy Procedure. The amended rules automatically become effective on December 1, 2012, unless Congress acts before then to reject, modify, or delay the rule changes. Several of the amendments involve technical and conforming changes to eliminate inconsistencies within the existing Bankruptcy Rules, as well as changes designed to make the bankruptcy rules consistent with the Federal Rules of Civil Procedure and the Federal Rules of Appellate Procedure.

The two most recent decisions of the Supreme Court involving federal taxes illustrate how a conservative approach to statutory interpretation tends to prevail, but only with great effort, and changing constituencies.

Hall v. United States

Occasionally we find a bankruptcy case that we know will be of interest to lenders, and this is one of them. I’m calling this one a “two-step” not just because it makes for a catchy title, but also because this is the second time we’ve seen this case, and this time the outcome is less favorable.