In a recently published opinion, Judge John K. Olson of the United States Bankruptcy Court for the Southern District of Florida permitted the bankruptcy estates of TOUSA, Inc. and its debtor subsidiaries to avoid and recover more than $1 billion of liens and cash that the debtors had transferred to secured lenders in a transaction entered into six months prior to the debtors’ chapter 11 bankruptcy filing. Official Committee of Unsecured Creditors of TOUSA, Inc. v. Citicorp North America, Inc., 2009 Bankr. LEXIS 3311 (Bankr. S.D. Fla. Oct. 13, 2009).
There is something for everyone in the suitably named Worker, Homeownership, and Business Assistance Act of 2009–including potential recoveries for unsecured creditors of a debtor reorganizing or liquidating pursuant to the United States Bankruptcy Code.
Background
Bankruptcy Rule 2019, an often ignored procedural rule in U.S. bankruptcies, has returned to the public eye with a vengeance in light of a recent ruling by the influential Bankruptcy Court for the District of Delaware¹ and controversial pending amendments to Rule 2019 proposed by the Committee on Rules of Practice and Procedure of the Judicial Conference of the United States (the “Rules Committee”). The amendments will be the subject of a public hearing held in New York City on February 5, 2010.²
Lehman Brothers Holdings Inc.’s September 15, 2008 bankruptcy was an event of default under thousands of derivatives contracts to which a Lehman entity was a party and for which Lehman Brothers Holdings was the guarantor. This default entitled the vast majority of Lehman’s counterparties to terminate these contracts, and almost all were terminated.
As we count down the days until the New Year, we are reminded of the momentous year we will leave behind us on December 31. While memorable for many things, 2009 may long be remembered as a year of record corporate insolvency. In 2009, General Motors, CIT, Chrysler, and Thornburg Mortgage filed four of the ten largest corporate bankruptcies in U.S. history. Equally notable are the number of corporate filings made in 2009.
The Supreme Court declines to review a circuit court decision in Oneida Ltd., which held that a debtor cannot discharge in bankruptcy, as a prepetition claim, premiums it owes to the Pension Benefit Guaranty Corporation in connection with the termination of a pension plan.
Introduction
No. 09-6024 (8th Cir. BAP 11/30/09)
No. 09-6063 (8th Cir. BAP 11/24/09)
Businesses considering filing Chapter 11 for bankruptcy protection may not necessarily be able to avoid certain environmental cleanup obligations. The underlying policy goals of bankruptcy and environmental laws are in direct conflict in that bankruptcy law seeks to promote financial rehabilitation by discharging a debtor's past obligations in order to promote financial rehabilitation while environmental law seeks to ensure that the government can order responsible parties to clean up contamination, including historical pollution caused by business predecessors.
The term “stalking horse” originally referred to a horse or type of screen a hunter used to conceal his position from intended prey. Today the term takes a new meaning altogether thanks to its application in the bankruptcy context. A modern day “stalking horse” is an interested buyer of a debtor’s assets who is offered incentives for being the first to announce its intent. As the initial bidder, the stalking horse sets the minimum purchase price and other terms of the transaction.