The Barton doctrine (named after the U.S. Supreme Court case Barton v. Barbour, 104 US 126 (1881)), generally prohibits suits against receivers and bankruptcy trustees in forums other than the appointing courts, absent appointing court's permission. It applies to suits that involve actions done in the officers' official capacity and within their authority as officers of the court.

SEC and FDIC Propose Dodd-Frank Broker-Dealer Resolution Rules

As is well known, the right to credit bid is the entitlement of a secured lender to bid the amount of its outstanding claims at the sale of its collateral. If the secured lender places the winning bid, no money is exchanged and the purchase price is offset against the existing claims. Credit bidding provides an important right to secured lenders in ensuring that their collateral is not sold for a depressed value. If a secured lender thinks its collateral is being sold too cheaply, it has the option of taking the collateral in exchange for some or all its claims.

It’s been quite a week for important cases on TUPE and its operation in relation to administrations. The Court of Appeal has delivered two judgments which are of considerable importance for those contemplating and structuring transactions out of administration.

The key points to note are that:

The High Court has struck down a company voluntary arrangement on the ground that it unfairly prejudiced a landlord who was to lose the benefit of a guarantee given by the tenant’s parent company. The judge said it was “unreasonable and unfair in principle” to require the landlord to give up the guarantee and there was “no sufficient justification” for requiring the landlord to accept a sum of money in lieu.

Summary

A recent decision of the New York Court of Appeals, Sutton v. Pilevsky held that federal bankruptcy law does not preempt state law tortious interference claims against non-debtors who participated in a scheme that caused a debtor—in this case a bankruptcy remote special purpose entity—to breach contractual obligations intended to ensure that the entity remains a Special Purpose Entity (SPE) and to facilitate the lenders’ enforcement of remedies upon a future bankruptcy filing, if any.

Two courts recently answered “yes,” finding that environmental claims brought against reorganized debtors by government entities were discharged under confirmed Chapter 11 plans of reorganization. In In re Exide Techs., 613 B.R. 79 (D. Del. 2020), the District of Delaware held that pre-petition, non-compensatory air quality penalties imposed on a Chapter 11 debtor by a state regulator were subject to discharge in bankruptcy. And in In re Peabody Energy Corp.

I.Exide Techs.: the Bankruptcy Code’s Exceptions to Dischargeability

In Mission Products Holdings, Inc. v. Tempnology, LLC, the U.S. Supreme Court resolved a question that vexed the lower courts and resulted in a circuit split: does the rejection by a debtor-licensor of a trademark license agreement terminate the licensee’s rights under the rejected license?

Is a foreign online customer of a bankrupt goods supplier subject to personal jurisdiction in the United States, when sued by a bankruptcy trustee for fraudulent transfers? Yes, says the Bankruptcy Court for the Northern District of California in In re Fox Ortega Enterprises, Inc. Debtor. Michael Kasolas, Chapter 7 Tr., Plaintiff, v. Johnny Yau, Defendant., No. 16-40050, 2018 WL 2191597 (Bankr. N.D. Cal. May 11, 2018).

Legal and Factual Background