The legalization under state law of the marijuana business in Colorado through Amendment 20 (medical marijuana) and Amendment 64 (recreational marijuana) (Amendment 20 and Amendment 64 shall be referred to collectively as the "Colorado Amendments") raises serious issues for banks whose customers or borrowers are involved in the marijuana business in Colorado. The Colorado Amendments do not affect federal law that defines marijuana as a Class 1 controlled substance.
A New York state court recently denied a motion to dismiss an action brought by a reorganized debtor against the former chair of the official committee of unsecured creditors in the debtor's chapter 11 case.1 The decision is noteworthy for its holding that the reorganized debtor had standing to commence an action against the former committee member even though the claim was not expressly listed as an asset of the estate in the debtor's chapter 11 disclosure statement.
Background
Chapter 15 of the Bankruptcy Code is designed to provide an effective mechanism to aid insolvency proceedings in foreign countries that involve a foreign debtor with assets, creditors and other parties in interest located in the foreign country as well as in United States. A foreign representative that is authorized to administer the foreign reorganization or liquidation or act as a representative of the foreign proceeding is the party who applies to the US bankruptcy court for recognition of the foreign proceeding.
Chapter 11 debtors and sophisticated creditor and/or shareholder constituencies are increasingly using postpetition plan support agreements (sometimes referred to as “lockup” agreements) to set forth prenegotiated terms of a chapter 11 plan prior to the filing of a disclosure statement and a plan with the bankruptcy court. Under such lockup agreements, if the debtor ultimately proposes a chapter 11 plan that includes prenegotiated terms, signatories are typically obligated to vote in favor of the plan.
Section 502(b)(6) of the Bankruptcy Code caps the amount of a lessor’s claim against a debtor-lessee for damages arising from the termination of a real property lease. The statutory cap is calculated according to a formula that considers, among other things, the date on which the lessor “repossessed” or the debtor-lessee “surrendered” the leased property. Because those terms are not defined in the Bankruptcy Code, however, courts disagree as to whether state or federal law should determine their meanings for the purpose of calculating the allowed amount of the lessor’s claims.
One of the hallmarks of the U.S. bankruptcy system is ready access to information concerning any entity that files for bankruptcy protection. The integrity of that system is premised upon the presumption that not only creditors and other interested parties in a bankruptcy case, but also the public at large, should have the ability to examine any document filed with the bankruptcy court.
October 17, 2013, will mark the eighth anniversary of the enactment of chapter 15 of the U.S. Bankruptcy Code as part of the comprehensive U.S. bankruptcy-law reforms implemented in 2005. Chapter 15, which governs cross-border bankruptcy and insolvency cases, is patterned after the Model Law on Cross-Border Insolvency (the “Model Law”), a framework of legal principles formulated by the United Nations Commission on International Trade Law (“UNCITRAL”) in 1997 to deal with the rapidly expanding volume of international insolvency cases.
Fifth Circuit’s Decision in In re Village at Camp Bowie I L.P.
Appellate panel affirms that creditor’s failure to seek adequate protection before turning collateral over to trustee terminates possessory lien.
On March 25, 2013, the Eighth Circuit Bankruptcy Appellate Panel affirmed the bankruptcy court’s order in In re WEB2B Payment Solutions, Inc., holding that a creditor loses its possessory lien when it turns collateral over to the bankruptcy trustee without first seeking adequate protection from the bankruptcy court.
FACTS
A new Illinois law will close a loophole through which some mortgages could be subject to avoidance in bankruptcy. The loophole, created by U.S. Bankruptcy Court’s (C.D. Illinois) 2012 In re Crane opinion, allowed a bankruptcy trustee to avoid a mortgage under 11 U.S.C. § 544(a)(3) unless it contained, among other provisions: 1) the amount owed, 2) the debt’s maturity date and 3) the underlying interest rate.