On January 28th, the Ninth Circuit addressed the issue of whether a Chapter 7 bankruptcy trustee had actual notice of an unrecorded refinanced mortgage when the bankruptcy petition was electronically filed simultaneously with schedules listing the mortgage as a secured debt. The Court held that the trustee lacked actual notice. The Court found that the filing of the petition was a separate event from the filing of the schedules. The trustee was therefore a bona fide purchaser for value without notice and under state bona fide purchaser law, the trustee could avoid the unrecorded mortgage.
On October 29, 2009, the California Court of Appeal, Sixth District, in Berg & Berg Enterprises, LLC v. Boyle, et al., unequivocally ruled that, under California law, directors of either an insolvent corporation or a corporation in the more elusively defined “zone of insolvency” do not owe a fiduciary duty of care or loyalty to creditors. In so ruling, California joins Delaware in clarifying directors’ duties when the corporation is insolvent or in the zone of insolvency.
Background
While 90 percent of life may be just showing up, showing up late may be just as bad as never showing up at all. Just ask two creditors who were told for the second time they cannot file claims in the Lehman Brothers bankruptcy case because they filed their claims too late.
An insolvency administrator may lose their right to restitution arising from an insolvency avoidance if they are prevented from exercising the right in good faith by their conduct in the context of the conclusion of a redemption agreement, by which the creditor (and opposing party) waives rights to separate satisfaction.
Decision
Executive Summary:
Executive Summary:
“The theme is clear: absent financial distress, there is no reason for Chapter 11 and no valid bankruptcy purpose.”
Under the Bankruptcy Code, a reorganization plan may be approved if (1) proposed in “good faith” under § 1129(a)(3), and (2) accepted by at least one class of creditors whose interests are impaired by the plan, see 11 U.S.C. § 1129(a)(10). In Village Green I, GP v. Fed.
The facts are as follows: an insolvency creditor challenged the decision of the administrator in bankruptcy of a company about not recognizing its credit. The credit derived from a guarantee granted to secure a promissory note from a company belonging to the group of the insolvent company.
On February 7, 2011, the Court of Appeals for the Second Circuit issued a highly significant opinion in two consolidated appeals from the order of the United States District Court for the Southern District of New York affirming the bankruptcy court’s confirmation of a chapter 11 plan of reorganization for DBSD North America and its subsidiaries (DBSD).