The Bankruptcy Court for the District of Delaware recently ruled in In re NE OPCO, INC., 2013 Bankr. LEXIS 4569 (Bankr. D. Del. Nov. 1, 2013), that electricity is not a “good” for purposes of 11 U.S.C. § 503(b)(9).
Although its Israel-based electric car company had already filed bankruptcy in its home country, Better Place, Inc., the U.S. parent of the foreign debtor, filed for protection under chapter 15 of the Bankruptcy Code with the United States Bankruptcy Court for the District of Delaware earlier this summer, in the hopes of obtaining protection of its U.S. assets while the foreign bankruptcy was being administered.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) is the most recent significant amendment to the United States Bankruptcy Code. Many issues have arisen since its enactment. Of particular interest to those practicing in the Chapter 11 arena involves the absolute priority rule in individual Chapter 11 cases. Courts have split over whether an individual Chapter 11 debtor can confirm a plan of reorganization over the objections of unsecured creditors without regard to the absolute priority rule set forth in section 1129 of the Bankruptcy Code (Code).
Last year, a U.S. bankruptcy court held that a bankruptcy trustee could settle a Financial Industry Regulatory Authority (“FINRA”) suit against a broker-dealer by its former employee seeking damages and expungement of alleged false and defamatory FINRA Form U-5 termination disclosure language, over the objection of the former employee-debtor.2 Once a bankruptcy case is filed by a former employee, the claims become property of the bankruptcy estate.
In a decision that comes as welcome news to some employers, the Ninth Circuit Court of Appeals recently ruled that an employer that incurred withdrawal liability to a multiemployer pension plan had not become a plan fiduciary by failing to pay the withdrawal liability, and could discharge that liability in bankruptcy.
The Bottom Line:
What you need to know:
One of the ironic issues for failing banks has been the fact that banks that they have had to continue to deal with their borrowers and depositors in the ordinary course of business even though they are already in the queue for resolution by the FDIC. So for example, loans continue to get renewed and documents executed. What happens if you renew a loan shortly before the bank fails, do you have some sort of defense to enforcement of the loan when the successor bank or the FDIC makes demand on you?
In a recent decision [1] arising from the In re Residential Capital LLC, et al.
The Supreme Court of the United States denied a petition for writ of certiorari of the debtor, Castleton Plaza, LP, in Castleton Plaza, LP v. EL-SNPR Notes Holdings, LLC, Case No. 12-1422, meaning the prior opinion from the Seventh Circuit Court of Appeals in In the Matter of Castleton Plaza, LP, 707 F.3d 821 (7th Cir. 2013), remains intact, protecting creditors who are faced with being shortchanged by a reorganization plan proposed by a debtor that attempts to transfer the future ownership of the debtor to an insider without first putting the ownership stake up for auction.