CentsAbility: Creditors' Rights Law Update

The Fourth Circuit has held that in a case where the rate of interest on a residential mortgage loan had been increased upon default, a Chapter 13 Plan proposing to “cure” default under 11 U.S.C. §1322(b) is an impermissible modification barred by §1322(b)(2).

CentsAbility: Creditors' Rights Law Update

The U.S. Bankruptcy Court for the Eastern District of North Carolina in InRe Reuben Samuel Royal, Case No, 14-07134-DMW (May 2, 2016) recently concluded that the Chapter 13 debtors cannot surrender a vehicle back to the lender after confirmation of a Chapter 13 plan even though the vehicle was depreciating or declining in value.

It is estimated that roughly 300 upstream companies will file for bankruptcy in 2016, and many management teams are curious about hedging alternatives during the restructuring and bankruptcy process. There are various alternatives management teams can take with their hedging programs, ranging from full liquidation to actually increasing hedge coverage. The following discusses the purpose of an effective risk management program, what typically happens to hedges during the bankruptcy process, and the hedging alternatives for a distressed company.

Adding to the unsettled body of case law on the enforceability of prepetition waivers of the automatic stay, on April 27, 2016, the U.S.

Last week we blogged about 

Law360, New York (May 5, 2016, 12:02 PM ET) -- A core principle of bankruptcy tax litigation holds that “bankruptcy courts have universally recognized their jurisdiction to consider tax issues brought by the debtor, limited only by their discretion to abstain.” IRS v. Luongo, 259 F.3d 323, 329-330 (5th Cir. 2001) (citing In re Hunt, 95 B.R. 442, 445 (Bankr. N.D. Tex. 1989). The Second Circuit recently departed from that generally accepted principle in United States v. Bond, 762 F.3d 255 (2d Cir. 2014).

The U.S. Court of Appeals for the Fourth Circuit recently affirmed the dismissal of a borrower’s lawsuit against a bank, holding that the district court correctly found that sale orders entered in a prior bankruptcy case were res judicata and precluded the borrower’s new claims.

A copy of the opinion is available at:  Link to Opinion.

What happens when the counterparties on both sides of a contract are debtors in separate bankruptcy cases and their estates have contrary views about whether to reject or assume a contract?

(Bankr. W.D. Ky. Apr. 26, 2016)

(Bankr. W.D. Ky. Apr. 22, 2016)