In a decision that reaffirms its previous rulings on the jurisdictional limits of bankruptcy courts, the US Court of Appeals for the Third Circuit recently held in W.R. Grace & Co. v. Chakarian (In re W.R. Grace & Co.)1 that bankruptcy courts lack subject matter jurisdiction over third-party actions against non-debtors if such actions could affect a debtor’s bankruptcy estate only following the filing of another lawsuit.
The South Florida Bankruptcy Court in the Tousa case ordered various creditors that had benefitted from a fraudulent conveyance to disgorge $421,000,000 to the jointly-administered Tousa bankruptcy estates. The court also ordered the avoidance of liens on the assets of various Tousa subsidiary entities who were also debtors in the bankruptcy proceedings. This case may raise increased focus upon the legal theory of fraudulent conveyance, which was the rationale used by the bankruptcy court to order the money returned.
The following is a list of some recent larger U.S. bankruptcy filings in various industries. To the extent you are a creditor to any of these debtors, or other entities which may have filed for bankruptcy protection, you as a creditor are entitled to certain protections under the Bankruptcy Code.
PUBLISHING
White Birch Paper Co. filed for bankruptcy protection in Canada on Wednesday, while its American subsidiary Bear Island Paper Co. LLC filed for Chapter 11.
RETAIL
Introduction
Section 548 of the United States Bankruptcy Code allows for the avoidance of transfers that are either intentionally or constructively fraudulent. Section 548 provides, in relevant part, as follows:
Lehman Brothers Holdings Inc. (“LBHI”) and its affiliate and subsidiary debtors (collectively, “Lehman”) filed their proposed chapter 11 plan of reorganization in their jointly administered chapter 11 proceedings on Monday, March 15, 2010 (Docket No. 7572). Monday was the last day for Lehman to file a plan pursuant to section 1121(d) of the Bankruptcy Code in order for Lehman to maintain the exclusive right to file and obtain confirmation of a plan.¹
2006 FICA Refund Claims Due April 15, 2010
The Eleventh Circuit Court of Appeals has just issued an opinion that should concern anyone doing business with a debtor in bankruptcy. In short, the court ruled that a company that supplied $1.9 million worth of goods to a debtor after the petition date had to return the debtor's payment. The reason? The debtor did not have permission from the court or its secured creditor to use the money. The payments were for value given post-petition and were apparently made in accordance with the pre-petition practice between the parties.
Lehman Brothers Holdings Inc. (LBHI) and its affiliated U.S. chapter 11 debtors (the “Debtors”) filed a joint plan with the Bankruptcy Court on March 15, the last day on which the Debtors who filed petitions on September 15, 2008, had the exclusive right to file a plan. As a result of the filing, the Debtors have an additional 60 days during which no other party may file a plan.
The Bankruptcy Court has now provided its long-awaited answer as to the scope of the Securities Investors Protection Corporation (“SIPC”) liability for investor accounts with Bernard L. Madoff Investment Securities LLC (“Madoff”). The ruling in favor of Irving Picard, the trustee responsible for the Securities Investor Protection Act (“SIPA”) liquidation of Madoff, precludes recovery for many of the victims of Bernard Madoff’s infamous ponzi scheme and leaves the scope of the SIPC protection uncertain in future cases.
On March 22, 2010, a three judge panel of the United States Court of Appeals for the Third Circuit issued a highly anticipated decision in the matter of In re Philadelphia Newspapers LLC, 2010 WL 1006647, (3rd Cir. Case No.