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.
The U.S. Court of Appeals for the Fifth Circuit, on Sept. 3, 2014, vacated bankruptcy court and district court Chapter 11 debtor-in-possession (“DIP”) financing orders due to: (1) the lender’s lack of good faith in relying on a third party’s shares of stock as collateral; and (2) the bankruptcy court’s lack of subject matter jurisdiction. In re TMT Procurement Corp., 2014 WL 4364894 (5th Cir. Sept. 3, 2014).
In a recent bench decision in In re MPM Silicones, LLC et al., Case No. 14-22503-RDD (Bankr. S.D.N.Y. August 26, 2014), the Bankruptcy Court considered bondholders’ right to recover make-whole premiums (premiums paid for early repayment of debt) upon the payment of accelerated debt following the borrower’s bankruptcy default. The Court ruled that the governing loan documents lacked specific language requiring a make-whole premium upon acceleration.
In connection with a proposed sale of real property, a chapter 11 debtor sought to prohibit the mortgagee from submitting a credit bid. It contended that there was “cause” based on its argument that the mortgagee’s claims were subject to a bona fide dispute.
The extent of a transferee’s knowledge in the context of fraudulent transfer claims under the Bankruptcy Code has been a frequent topic of discussion on the Weil Bankruptcy Blog.
To paraphrase Samuel Johnson, publication notice is, quite often, the debtor’s “last refuge.” Yet it is frequently a necessary feature of the notices provided in bankruptcy cases. Debtors rarely possess an accurate method for notifying the many unidentifiable potential claimants. And so enters publication notice. Pursuant to well-settled law, publication notice – if sufficient – may satisfy the requirement to provide due process to unknown creditors in a bankruptcy proceeding.
In a case that was converted from a chapter 11 reorganization to a chapter 7 liquidation, the debtor sought an order directing the trustee to abandon certain real estate, arguing that there was no equity for the bankruptcy estate. A lender had already obtained relief from the automatic stay permitting it to foreclose on the property, and the debtor wanted to do a short sale with the consent of the lender. The chapter 7 trustee opposed the motion.
In its Scantling opinion, the Eleventh Circuit held that a Chapter 20 debtor (a chapter 13 debtor who previously filed and concluded a chapter 7 case) could strip off valueless junior liens on her principal residence even thought she was ineligible for a discharge in the chapter 13 case. Full disclosure: our firm, Berger Singerman, represented the appellee, Ms. Scantling.
On August 26, 2014, the Honorable Robert D. Drain, Bankruptcy Judge of the United States Bankruptcy Court for the Southern District of New York, issued several bench rulings (the “Bench Rulings”) in connection with confirmation of a plan of reorganization in the chapter 11 cases of MPM Silicones, LLC, et al.
On August 26, 2014, the Ninth Circuit Court of Appeals held that Wells Fargo (the “Bank”) did not violate the automatic stay by placing a temporary administrative hold on a chapter 7 debtor’s bank accounts. See In re Mwangi, 2014 WL 4194057 (9th Cir. 2014). Holland & Hart represented the Bank in this significant victory.