Sunrise, sunset. Perhaps a matchmaker would have helped. The saga of the dispute between Ventas, Inc. and Health Care Property Investors, Inc. arose five years ago when Sunrise Senior Living Real Estate Investment Trust’s "board of trustees determined that a strategic sale process of its assets would be beneficial to its unitholders, thus effectively putting Sunrise ‘in play’ on the public markets" (per Blair J.A. for the Ontario Court of Appeal) in Ventas, Inc. v.

On July 26, 2016, a three-judge panel of the U.S. Court of Appeals for the Seventh Circuit ruled that the Bankruptcy Code section 546(e) "safe harbor" applicable to constructive fraudulent transfers that are settlement payments made in connection with securities contracts does not protect "transfers that are simply conducted through financial institutions (or the other entities named in section 546(e)), where the entity is neither the debtor nor the transferee but only the conduit."FTI Consulting, Inc. v. Merit Management Group, LP, 2016 BL 243677.

The U.S. Supreme Court has handed down two rulings thus far in 2016 (October 2015 Term) involving issues of bankruptcy law. In the first, Husky Int’l Elecs., Inc. v. Ritz, 194 L. Ed. 2d 655, 2016 BL 154812 (2016), the Court addressed the scope of section 523(a)(2)(A) of the Bankruptcy Code, which bars the discharge of any debt of an individual debtor for money, property, services, or credit to the extent obtained by "false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition."

In the November/December 2014 edition of the Business Restructuring Review, we discussed a decision handed down by the U.S. District Court for the District of Delaware addressing the meaning of “unreasonably small capital” in the context of constructively fraudulent transfer avoidance litigation. In Whyte ex rel. SemGroup Litig. Trust v.

On May 16, 2016, the U.S. Supreme Court decided Husky International Electronics, Inc. v. Ritz, No. 15-145, holding that the "actual fraud" bar to discharge under section 523(a)(2)(A) of the Bankruptcy Code encompasses an individual debtor's knowing receipt of fraudulently transferred property.

Statutory Background

In Ritchie Capital Mgmt., LLC v. Stoebner, 779 F.3d 857 (8th Cir. 2015), the U.S. Court of Appeals for the Eighth Circuit affirmed a bankruptcy court’s decision that transfers of trademark patents were avoidable under section 548(a)(1)(A) of the Bankruptcy Code and Minnesota state law because they were made with the intent to defraud creditors.

In Weisfelner v. Blavatnik(In re Lyondell Chemical Company), 2017 BL 131876 (Bankr. S.D.N.Y. Apr. 21, 2017), the bankruptcy court presiding over the chapter 11 case of Lyondell Chemical Company ("Lyondell") handed down a long-anticipated opinion in the protracted litigation concerning the failed 2007 merger of Lyondell with Basell AF S.C.A. ("Basell"), a Netherlands-based petrochemical company.

On May 1, 2017, the U.S. Supreme Court agreed to hear Merit Management Group v. FTI Consulting, No. 16-784, on appeal from the U.S. Court of Appeals from the Seventh Circuit. See FTI Consulting, Inc. v. Merit Management Group, LP, 830 F.3d 690 (7th Cir. 2016) (a discussion of the Seventh Circuit's ruling is available here).

With its landmark ruling in Deutsche Bank Trust Co. Ams. v. Large Private Beneficial Owners (In re Tribune Co. Fraudulent Conveyance Litig.), 818 F.3d 98 (2d Cir. 2016) ("Tribune 1"), the U.S. Court of Appeals for the Second Circuit held that claims asserted by creditors of the Tribune Co. ("Tribune") seeking to avoid payments to shareholders during a 2007 leveraged buyout ("LBO") as constructive fraudulent transfers were preempted by the "safe harbor" under section 546(e) of the Bankruptcy Code.

The Bankruptcy Court for the District of Delaware recently faced a question of first impression: whether an allowed postpetition administrative expense claim can be used to set off preference liability. In concluding that it can, the court took a closer look at the nature of a preference claim.

Facts and Arguments