The Absolute Priority Rule: Zachary v. California Bank & Trust

As you may know by now, many of the Official Forms for use in Bankruptcy Courts were replaced with revised, reformatted and renumbered forms that went into effect on December 1, 2015. The changes were made as part of a forms modernization effort that began in 2008 to improve the official bankruptcy forms and the interface between the forms and the courts’ case opening and electronic case management technology.

Determining how to increase or preserve a debtor’s liquidity is crucial to analyzing its deleveraging options. Companies with significant labor liabilities need to explore whether attaining cost savings through rejection of their collective bargaining agreements (CBAs) is a viable alternative.  The decision from the United States Court of Appeals for the Third Circuit in 

The Ninth Circuit Court of Appeals has now joined the Courts of Appeals from the Fourth, Fifth, Sixth and Tenth Circuits, and the Eighth Circuit Bankruptcy Appellate Panel (BAP) in holding that the absolute priority rule found in 11 U.S.C. § 1129(b)(2) (“the Absolute Priority Rule”) applies to limit individual debtors’ rights to retain prepetition property of their estate where their Chapter 11 plans propose to pay unsecured creditors less than the full amount of their allowed unsecured claims.  Zachary v.

A higher education institution which refuses to provide a debtor alumna with a graduation transcript violates the automatic stay provisions of the Bankruptcy Code, 11 U.S.C. § 362(a). So says the United States Bankruptcy Court for the Middle District of Pennsylvania in California Coast University v. Jamie Sue Aleckna, Chapter 13, Case No. 5-12-BK-03367. The Bankruptcy Court, citing a Massachusetts bankruptcy court case, In re Parker, 334 B.R. 529 (Bank. D. MA.

Addressing latent claims in bankruptcy cases has always been a challenge, and debtors are often left with uncertainty as to whether such claims have been discharged.  Although the legal standard for what constitutes a “claim” under the Bankruptcy Code in the Third Circuit has evolved to give debtors and potential claimants more clarity with respect to the treatment of latent claims, the uncertainty remains for plans confirmed prior to 2011.  A recent decision from the District of New Jersey, 

A bankruptcy judge in New York court recently dismissed a case filed under chapter 15 of the U.S. Bankruptcy Code because the debtors did not have their center of main interests or business operations in the jurisdiction where the initial, foreign case was filed, the British Virgin Islands (BVI). In re Creative Finance Ltd. (In Liquidation), No. 14-10358, 2016 WL 156299 (Bankr. S.D.N.Y. Jan. 13, 2016).

On January 15, 2016, the United States Court of Appeals for the Third Circuit (the “Third Circuit”) held in In re Trump Entertainment Resorts that section 1113 of the Bankruptcy Code permits a debtor to reject an expired collective bargaining agreement (“CBA”).

On Aug. 4, 2015, in City of Concord, New Hampshire v. Northern New England Telephone Operations LLC (In re Northern New England Telephone Operations LLC), No. 14-3381 (2nd Cir. Aug. 4, 2015), the U.S. Court of Appeals for the Second Circuit addressed the circumstances under which a creditor's lien on the property of a debtor may be extinguished through a Chapter 11 plan of reorganization.

(Bankr. W.D. Ky. Feb. 16, 2016)