RIVER ROAD HOTEL PARTNERS v. AMALGAMATED BANK (June 28, 2011)

Introduction

This article is for non-bankruptcy attorneys who have clients that may become involved in a bankruptcy case because they sold goods to a party that subsequently filed bankruptcy (a “debtor”). Accordingly, this article discusses, among other things, factors influencing whether trade creditors should become actively involved in a bankruptcy and the remedies available to trade creditors in bankruptcy.

I. Who Is A Trade Creditor

During her lifetime, Vickie Lynn Marshall, publicly known as Anna Nicole Smith (“Vickie”), was hardly a stranger to the prying eyes of the media. Today, the late Vickie is again the subject of media coverage, this time in the context of a fifteen-year legal saga that has twice reached the United States Supreme Court.

The Bottom Line:

Back in the mists of time, a seller that had a valid reclamation claim but was denied the return of its goods was entitled to an administrative expense claim (a claim with a higher priority than a general unsecured claim and thus a better chance of getting paid) or a lien on the debtor’s assets. The 2005 amendment to § 546(c) of the Bankruptcy Code changed all that by stripping away those alternative remedies.

The Bottom Line:

The Bottom Line:

The FDIC has recently appealed a loss it suffered at trial on the question of whether the debtor in bankruptcy (the holding company of a failed bank) made a “commitment” to maintain the capital of its subsidiary bank under Section 365(o) of the Bankruptcy Code.  After a week-long bench trial with an advisory jury, the Northern District of Ohio rejected the FDIC’s claim that a commitment had been made by the holding company to the Office of Thrift Supervision.  The F

DBSD Case Upholds Designation of Votes Cast By a Claims Purchaser