In 1984, the Third Circuit was the first court of appeals to examine the Bankruptcy Code’s new definition of “claim” in Avellino & Bienes v. M. Frenville Co. (In re M. Frenville Co.), 744 F.2d 332 (3d Cir. 1984). Focusing on the “right to payment” language in that definition, the court decided that a claim arises when a claimant’s right to payment accrues under applicable nonbankruptcy law. This “accrual” test was widely criticized by other circuit courts as contradicting the broad definition of “claim” envisioned by Congress and the Bankruptcy Code.

In a case of first impression, the Third Circuit Court of Appeals in In re American Home Mortg. Holdings, Inc., 637 F.3d 246 (3d Cir. 2011), held that, for purposes of section 562 of the Bankruptcy Code, a discounted cash flow analysis was a “commercially reasonable determinant” of value for the liquidation of mortgage loans in a repurchase transaction.  

The U.S. Supreme Court’s October 2010 Term (which extends from October 2010 to October 2011, although the Court hears argument only until June or July) officially got underway on October 4, three days after Elena Kagan was formally sworn in as the Court’s 112th Justice and one of three female Justices sitting on the Court.

A creditor’s ability in a bankruptcy case to exercise rights that it has under applicable law to set off an obligation it owes to the debtor against amounts owed by the debtor to it, thereby converting its unsecured claim to a secured claim to the extent of the setoff, is an important entitlement.

2002 was a seminal year for restructuring and insolvency professionals in the U.K. In November of that year, the eagerly anticipated Enterprise Act of 2002, which was intended to lay the statutory foundations for the “rescue culture,” received royal assent. Six months earlier, with considerably less fanfare, the EC Regulation on Insolvency Proceedings (EC No. 1346/2000) (the “Regulation”) was introduced throughout the EU (except Denmark). A clear understanding of how these twin pieces of law operate is crucial when reviewing a stakeholder’s options once a company becomes distressed.

On July 16, 2014, the Uniform Law Commission (the "Commission") approved a series of amendments to the Uniform Fraudulent Transfer Act (the "UFTA"), which is currently in force in 43 states (all states except Alaska, Kentucky, Louisiana, Maryland, New York, South Carolina, and Virginia).

Editor’s Note: On June 16, 2016, The Bankruptcy Cave gave you our summary of the controversial Sabine decision. At that time, post-hearing motions were pending.

A recent decision out of a New Jersey Bankruptcy Court highlights a loophole in the Bankruptcy Code which may allow Chapter 7 debtors to keep significant assets out of the hands of trustees and creditors.

The Supreme Court’s Decision:

Weird things happen in bankruptcy court. All you high-falutin Chapter 11 jokers out there, cruise down to the bankruptcy motions calendar one day.