The U.S. Bankruptcy Court for the Southern District of New York recently declined to dismiss the Chapter 11 petitions of several subsidiaries of General Growth Properties, Inc. (GGP) demonstrating that special purpose entities (SPEs), designed to avoid bankruptcy, can be subject to bankruptcy proceedings despite having strong cash flows, no debt defaults and "bankruptcy remote" structures.

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  

Auto Cast, Inc. files Chapter 11 in the Western District of Michigan.  

Cooper-Standard Holdings Inc. and its affiliated debtors file Chapter 11 in the District of Delaware.  

After holding a hearing on the topic this past July, the Congressional Oversight Panel (COP) released a report earlier this week entitled, “The Use of TARP Funds in Support and Reorganization of the Domestic Automotive Industry,” examining how TARP funds have been used to support and reorganize both

In a decision made on August 11, 2009, the U.S. Bankruptcy Court for the Southern District of New York allowed solvent, special purpose entity subsidiaries of a bankrupt parent company, General Growth Properties, Inc., to maintain their Chapter 11 bankruptcy cases, raising several important issues related to the use of special purpose entities structured to be "bankruptcy-remote."

GGP Business Model and 2009 Bankruptcy Filings

The judge responsible for the Lehman bankruptcy proceedings in the United States has found that the provisions of the US bankruptcy code that exempt swap agreements and master netting agreements from the application of the Code's automatic stay and other relevant provisions do not permit a party to an ISDA Master Agreement to suspend performance under Section 2 (a) (iii) of the master agreement.

For the fashion industry, one of the must-have, but hard to come by, items this season is a favorable refinancing deal. The recent volatility in the fashion market has reflected not just the ever-changing tastes of the cognoscenti, but also the rapidly shifting economic landscape confronting designers and retailers. The fashion industry has suffered acutely in the global financial crisis as consumers curb their spending, particularly in the luxury goods market. In fact, analysts have estimated that 12% of fashion companies will not survive the recession.  

On September 17, 2009 Judge Peck of the United States Bankruptcy Court for the Southern District of New York issued two orders that may significantly impact parties who held, or still currently hold, derivative contracts with Lehman Brothers Special Financing Inc. (LBSF) or any of the other debtors in the Lehman Brothers bankruptcy cases (the Debtors).

In U.S. v. Apex Oil, a three-judge panel of the Seventh Circuit ruled 3-0 that EPA’s cleanup injunction against the corporate successor to a chemical company was not discharged in Chapter 11 because the injunction does not create a right to payment and, consequently, is not a ‘debt’ under the Bankruptcy Code.

In today's difficult economic climate, a growing number of companies have been forced to consider or even file for bankruptcy. Such filings may result in a stay of legal claims against the company, including those brought by current or former employees under the Fair Labor Standards Act (FLSA). But according to the Ninth Circuit, a company's filing for bankruptcy does not protect its individual executives and managers from potential liability under the FLSA.

Earlier this year, Courts from the Bankruptcy Courts for the Southern District of New York to the United States Supreme Court issued a number of rulings approving the asset sales by Chrysler and General Motors. Although popular and industry media have been replete with stories regarding the facts of these cases, this article provides an in-depth analysis of the Courts’ rulings on several key issues of interest to debtors and creditors in future bankruptcies.

Summary of Key Rulings