On May 1, 2012, the United States Court of Appeals for the Third Circuit in In re Federal–Mogul Global, Inc. confirmed that anti-assignment provisions in a debtor’s insurance liability policies are preempted by the Bankruptcy Code to the extent they prohibit the transfer of a debtor’s rights under such policies to a personal-injury trust pursuant to a chapter 11 plan.In re Federal-Mogul Global Inc., --- F.3d ---, 2012 WL 1511773 (3d Cir. 2012).

In the aftermath of the 2009 bankruptcies of Chrysler LLC (“Old Chrysler”) and General Motors Corporation (“Old GM”), Congress enacted Section 747 of the Consolidated Appropriations Act of 2010, Pub. L. No.

Relying on the U.S. Supreme Court’s decision inAT&T Mobility LLC v. Concepcion, the Ninth Circuit Court of Appeals recently held that California’s rule against compulsory arbitration of claims for public injunctive relief was preempted by the Federal Arbitration Act (“FAA”). The Court also underscored the key points of an enforceable arbitration clause. Kilgore v. KeyBank (March 7, 2012).

Case Background

The U.S. Bankruptcy Court for the District of Massachusetts ruled that the Massachusetts Predatory Home Loan Practices Act, Chapter 183C of the General Laws of Massachusetts, is preempted by the high cost home loan provisions of the federal Truth in Lending Act (“TILA”) for federally chartered depository institutions. The July 27 ruling came in a case brought by Massachusetts residents who had jointly received a home mortgage loan from a national bank.

Delaware companies take note: a state court has ruled that companies in apparent good financial health may not use the bankruptcy process to avoid shareholder approval of an asset sale—even in situations in which a shareholder vote may be difficult to obtain.

A bankruptcy court wrote that filing for bankruptcy is “powerful magic.”  By finding federal preemption of state law fraudulent transfer claims, the Second Circuit Court of Appeals’ decision in the long-running Tribune case showed just how powerful this magic can be.

In a unanimous decision arising out of the Tribune Media Company bankruptcy cases, a panel of the Second Circuit held that the safe harbor under section 546(e) of the Bankruptcy Code, which precludes avoidance of certain transfers by a

Second Circuit holds that Bankruptcy Code preempts creditors’ state law constructive fraud claims.

The U.S. Court of Appeals for the Second Circuit recently ruled that constructive fraudulent conveyance claims arising under state law are preempted by the U.S. Bankruptcy Code, 11 U.S.C. § 101 et seq. (Code), where the transfers were made by or to financial intermediaries effectuating settlement payments in securities transactions or made in connection with a securities contract, irrespective of whether the plaintiff is a debtor in possession, bankruptcy trustee or other creditors’ representative.

In a recent adversary proceeding in the chapter 11 case involving Ames Department Stores, Inc. (“Ames”), Lumbermens Mutual Casualty Company (“Lumbermen’s”) argued that under the McCarran-Ferguson Act, the issues in dispute between it and Ames should be decided in Illinois state court as part of Lumbermens’ insolvency proceedings.