In re Arenas, 514 B.R. 887 (Bankr. D. Colo. 2014) –

The U.S. trustee sought to dismiss “for cause” a chapter 7 case filed by a marijuana grower and his wife. The debtors countered by moving to convert to a chapter 13 case. The case turned on the impact of the federal Controlled Substances Act.

The United States Supreme Court recently ruled in Stern v. Marshall1 that a bankruptcy court lacks constitutional authority to render a final judgment on a bankruptcy estate’s counterclaim against a creditor based on state common law, despite an express statutory grant of jurisdiction. This ruling is the most significant decision regarding bankruptcy court jurisdiction since the Court’s 1982 decision in Northern Pipeline v. Marathon2 and it could significantly affect the administration of bankruptcy cases.

Root of the Constitutional Problem

Fraudulent conveyance litigation arising from failed leveraged buyout transactions is frequently pursued in bankruptcy proceedings as the sole source of recovery for creditors. Targets of these actions typically include those parties who received the proceeds generated by the LBO, including the debtor’s former shareholders.

In re The Free Lance-Star Publ’g Co. of Fredericksburg, VA, 512 B.R. 798 (Bankr. E.D. Va. 2014) –

After the debtors obtained court approval of bidding procedures to auction substantially all of their assets, a secured creditor sought a court determination that it had valid perfected liens on the assets, and the debtors sought to limit the secured creditor’s right to credit bid in the bankruptcy sales.

Co-Author - Jehangir N. Mistry Mulla & Mulla & Craigie Blunt & Caroe

Co-Author - Shireen Pochkhanawalla Mulla & Mulla & Craigie Blunt & Caroe

This article was published in Bankruptcy Law360 and Corporate Finance Law360 on May 23, 2011. © Copyright 2011, Portfolio Media, Inc., publisher of Law360.  

As summarized in the March 2018 issue of the American Bankruptcy Institute Journal, ABI’s Consumer Bankruptcy Committee has recently issued several recommendations and made several observations regarding the treatment of student loans under the Bankruptcy Code, codified in Title 11 of the United States Code.

Dishi & Sons v. Bay Condos LLC, 510 B.R. 696 (S.D.N.Y. 2014) –

In approving the sale of a Chapter 11 debtor’s assets, a bankruptcy court found that a tenant of the debtor was entitled to continue in possession of the leased portion of the sold property for the remainder of its lease.  The successful bidder at the sale appealed, arguing that the sale was “free and clear” of the tenant’s interests. 

In a recent decision arising out of the Chapter 11 bankruptcy case of Global Industrial Technologies, Inc. (GIT),1 the U.S. Court of Appeals for the Third Circuit, sitting en banc, held that insurance companies that had issued liability insurance policies to a manufacturer before its bankruptcy filing had standing to object to confirmation of the company’s Chapter 11 plan of reorganization, even though the plan had been designed to be “insurance neutral” with regard to the policies.

The EAT's judgment

Summary of Some of the Key Commercial Insolvency Related Amendments to the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act

INTRODUCTION