Investors victimized by the fraud perpetrated by Bernard Madoff and his company, Bernard L. Madoff Investment Securities, LLC (collectively Madoff), should be aware of their legal options and risks. Some of these options have very short deadlines. Likewise, investors who successfully withdrew their investments before Madoff`s fraud came to light could face potential claims. In either circumstance, the prospects of litigation are high.
As the economy worsens and the value of corporate assets declines, unsecured creditors are finding that very little, if anything, is left for them at the bankruptcy table after the secured creditors have taken as much as they can from a debtor’s assets. Now, after a period of having copious credit available on attractive terms, debtors are going into bankruptcy without sufficient assets to pay even their secured creditors in full. In such circumstances, prospects for unsecured creditors are bleak indeed.
The U.S. Court of Appeals for the Fourth Circuit recently issued an opinion, reversing an earlier bankruptcy court ruling that had revived the question of whether a physical supply contract may qualify as a forward contract or swap agreement for purposes of the Bankruptcy Code. Previously, the bankruptcy court for the Eastern District of North Carolina ruled that what it termed a simple supply contract between a natural gas seller and an end-user, as a matter of law, does not constitute a swap agreement.
The U.S. Court of Appeals for the Third Circuit held on Feb. 3, 2009, that a debtor’s “strategic partnership” vendor was liable as a non-statutory insider for preferential payments it received approximately four months prior to the debtor’s bankruptcy. In re Winstar Communications, Inc., ___F.3d ___, 2009 U.S. App. LEXIS 1953, at *1 (3d Cir. 2/3/09). The court affirmed the bankruptcy court’s judgment (an 88-page decision with detailed fact findings), rendered after a 21-day bench trial that included 1,400 exhibits and 39 witnesses.
On December 10, 2008, Bernard Madoff confessed to his two sons that he had been running what amounted to a massive Ponzi scheme on the scale of approximately $50 billion and that he could no longer sustain it due to, among other things, substantial redemption requests. That night, his sons alerted authorities.
Setoff is a doctrine based as much on practical considerations as on equitable ones.
With approximately 7,000 asbestos-related lawsuits pending against it, Hercules Chemical has filed for bankruptcy protection under Chapter 11. The company is a manufacturer of chemicals for the plumbing industry. In ``Dispelling the Myths of Asbestos Litigation: Solutions for Common Law Courts,`` Rick Faulk discussed problems in the asbestos-driven toxic tort litigation system – a system that has led many companies to Chapter 11.
The following is a list of some recent larger U.S. bankruptcy filings in various industries. To the extent you are a creditor to any of these debtors, or other entities which may have filed for bankruptcy protection, you as a creditor are entitled to certain protections under the Bankruptcy Code.
AUTOMOTIVE
Parts maker Checker Motor Corp. files for Chapter 11 protection in Michigan.
Parts maker Contech U.S., LLC, affiliates files for Chapter 11 protection in Michigan.
PACKAGING
Given the current state of the economy, it should come as no surprise that business related bankruptcy filings increased 41.6 percent and non-business bankruptcies increased 28.4 percent between June 30, 2007, and June 30, 2008, with more than one million Americans filing for bankruptcy during calendar year 2007, according to the Administrative Office of the U.S. Courts.
There is a sense of inevitability that Congress will pass legislation allowing a Chapter 13 bankruptcy plan (also referred to as a wage-earner’s plan) to "cram-down" the value of a mortgage on a consumer's principal residence to its market value and/or reset debtor interest rate and monthly payments to an amount that permits them to remain in their homes. This alert summarizes the latest version of H.R.