Summary
This briefing summarizes the recent U.S. Bankruptcy Court order establishing bar dates for creditors filing claims in relation to debts owed to them by Lehman Brothers entities in Chapter 11 bankruptcy proceedings. Specifically, this briefing discusses who must file a proof of claim, how to file the proof of claim, and the special requirements for claims in respect of derivative contracts, guarantees and Lehman program securities.
The United States District Court for the Eastern District of New York, applying New York law, has held that an insured did not violate an insurance policy's cooperation clause when it agreed, without providing advance notice to the insurer, to lift the automatic bankruptcy stay with respect to certain personal injury actions filed against it. Admiral Ins. Co. v. Grace Indus., Inc., 2009 WL 2222369 (E.D.N.Y. July 23, 2009).
On July 27, 2009, the U.S. Court of Appeals for the Ninth Circuit held that a corporation's managers can be held personally liable under the Fair Labor Standards Act ("FLSA") for wages that the corporation failed to pay to employees prior to the employer's filing for bankruptcy. This opinion serves as a cautionary reminder of the risks managers potentially face when a corporation files for bankruptcy and has failed to pay its employees for all wages earned prior to the filing.
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
American Consolidated Transportation Cos., Inc and its affiliated debtors file for Chapter 11 in the Northern District of Illinois.
PHARMACEUTICALS
In the last several months, a number of major mass media companies have filed for chapter 11 relief, including Ion Media Networks, Sun-Times Media Group, Tribune Company, Young Broadcasting and NV Broadcasting. With the economy still struggling to recover, and asset values continuing to decline, commentators speculate that even more mass media related bankruptcies are on the horizon. Certain aspects of a mass media bankruptcy present unique challenges for the various stakeholders due to the special regulatory requirements involved.
Two D&O insurers have asked the U.S. Bankruptcy Court for the District of Minnesota to lift an automatic stay in a bankruptcy proceeding pending against their insureds so that the insurers can pursue their coverage defenses as counterclaims against the insureds in a pending declaratory judgment action.In Re Petters Company, Inc., et al., Case No. 08-45257 (Bankr. D. Minn.).
In a 56-page opinion, the U.S. Court of Appeals for the Second Circuit sent a long-pending trade secrets case, Jasco Tools, Inc. v. Dana Corporation, Appeal No. 08-2762-bk, back to the lower court for further proceedings because of the bankruptcy court's "flawed application of well established summary judgment principles." (Slip Op.
The recent steady drumbeat of Chapter 11 bankruptcy filings is producing an equally persistent corollary: creditors receiving new securities issued by the reorganizing debtor or a related party in full or partial satisfaction of the creditors’ claims. Some of these creditors-cum-investors never planned to receive securities. The paradigmatic example is a creditor that enters into a normal business transaction resulting in an obligation that the debtor company hasn’t yet satisfied when it files for reorganization.
Introduction
On August 11, the U.S. Bankruptcy Court for the Southern District of New York denied five motions to dismiss certain Chapter 11 bankruptcy cases filed by debtors, including a number of issuers of commercial mortgage-backed securities (CMBS), that are owned by mall operator General Growth Properties, Inc. (GGP). The movants, including special servicers of the CMBS issued by GGP, based their dismissal motions primarily on a claim that the debtor’s cases were filed in bad faith.