Crews v. TD Bank, N.A. (In re Crews), 477 B.R. 835 (Bankr. M.D.Fla. 2012) –

A mortgaged building was destroyed by fire prior to the mortgagor’s bankruptcy filing.  In an earlier opinion the bankruptcy court held in that the mortgagee had an equitable lien on the fire insurance proceeds of $350,000.  This opinion addresses the debtors’ attempt to avoid the equitable lien using their “strong arm” powers.

August 31, 2012: Second Circuit Adopts Abuse of Discretion Standard of Review for Equitable Mootness Decisions

The Fifth Circuit recently upheld a Texas Bankruptcy Court’s refusal to enforce non-debtor third party releases in the Mexican reorganization proceeding (known as a concursomercantil) of Mexican glass manufacturer Vitro SAB de CV. As a result of this decision, Wall Street and the capital markets will breathe a sigh of relief and will likely continue to extend credit to Mexican corporations with some confidence that guaranties will be enforced.

The IRS issued final regulations providing a limited exception to the anti-cutback rules under Code section 411(d)(6) for a plan sponsor that is a debtor in a bankruptcy proceeding. The anti-cutback rules generally prohibit amendments to qualified retirement plans that reduce or eliminate accrued benefits, early retirement benefits, retirement-type subsidies or optional forms of benefits.

Last week the Supreme Court refused to decide whether, when a trademark licensor files for bankruptcy relief or is placed in involuntary bankruptcy by its creditors, the licensee can keep the rights to the trademark. The Fourth Circuit had said “no” in a 1985 case so reviled that Congress enacted corrective legislation, and 27 years later, the Seventh Circuit said “yes.” Despite this circuit split, the Supreme Court refused to weigh in on the issue. As a result, trademark licensees in New York (Second Circuit), California (Ninth Circuit), and the rest of the country have no certainty.

California has seen a string of three Chapter 9 filings this year and faces a long line of distressed municipalities.  Given this backdrop, the California Public Employees’ Retirement System (“CalPERS”) figures to play a prominent role in the resolution of many of these situations (in or out of bankruptcy).  Thus, the bond‑buying public will scrutinize closely any steps that CalPERS takes to protect its claims in the Bankruptcy Court.

Last week, the Bankruptcy Court for the Northern District of Texas granted involuntary bankruptcy petitions against ten US subsidiaries of Mexican glassmaker Vitro S.A.B. de C.V. (the “New Debtor Subsidiaries” and “Vitro”, respectively). The ruling is a win in the multi-paned litigation involving certain petitioning noteholders (the “Noteholders”) in their fight against Vitro’s efforts to effect a non-consensual restructuring of their debt through a Mexican insolvency proceeding.

Pinellas County Property Appraiser v. Read (In re Read), 692 F3d 1185 (11th Cir. 2012) –

Under Section 505(a)(1) of the Bankruptcy Code, generally a bankruptcy court may determine the amount or legality of any tax. However, under Section 505(a)(2)(C) of the Bankruptcy Code ad valorem real or personal property taxes cannot be contested if the applicable time period under non-bankruptcy law has expired.

With companies facing significant distress due to vast over-leverage, debtors have increasingly turned to asset sales under Section 363 of the Bankruptcy Code, rather than Chapter 11 plans, to dispose of their assets quickly and begin the process of winding down their estates.  According to the UCLA-LoPucki Bankruptcy Research Database, less than 4 percent of all large, public company bankruptcies were resolved by substantial asset sales  from 1990-2000.  However, in the period from 2001-2010, that figure rose to nearly 20 percent – peaking in 2011 when 43 percent of large pu

Amid the economic hardships brought upon us by the Great Recession, the plight of cities, towns, and other municipalities across the U.S. has received a significant amount of media exposure. The media has been particularly interested in the spate of recent chapter 9 bankruptcy filings by Vallejo, Stockton, San Bernardino, and Mammoth Lakes, California; Jefferson County, Alabama; Harrisburg, Pennsylvania; and Central Falls, Rhode Island. A variety of factors have combined to create a virtual maelstrom of woes for U.S.