Editor’s Note:  One of the many fascinating things about restructuring work is its willingness to evolve by borrowing from other areas of the law.  Just as business practices change, new financing techniques evolve, and transactions become more complex, the bankruptcy world must adapt as well, to allow for a well functioning insolvency system and not a stilted, out of date process.  To that end, we at The Bankruptcy Cave love finding curious decisions in tangential fields of the law, and thinking about how they may change bankruptcy practice, or how bankruptcy pract

On Monday, the Vermont Public Safety Board (VPSB) threw up a roadblock against Fairpoint Communications’ quest to emerge from bankruptcy with the issuance of a 96- page order that rejects the company’s plan of reorganization. Saddled with debt accruing from its $2.3 billion purchase of landline phone assets from Verizon Communications in 2008, Fairpoint—a regional provider of landline telephone services in the states of Vermont, New Hampshire and Maine—filed for Chapter 11 bankruptcy protection in October of 2009.

The following is a list of some recent larger US bankruptcy filings in various industries. To the extent you are a creditor to any of these debtors, or other entities which may have filed for bankruptcy protection, you as a creditor are entitled to certain protections under the Bankruptcy Code.

NOVELTY

Party and novelty goods company Oriental Trading Co., Inc. has filed for Chapter 11 protection with a prepackaged plan of reorganization.

OIL

Perhaps prompted by revelations that one or more Connecticut-based insurers failed to notify individuals or report known data security incidents or breaches until weeks, or even months, after the data had been lost or stolen, the state's Insurance Commissioner has issued stringent new reporting obligations applicable to all entities regulated by the Connecticut Department of Insurance (CDI), including, for example, insurers, agents, brokers, adjusters, health maintenance organizations, preferred provider networks, discount health plans and certain consultants and utilization review companie

Chinese telecom equipment firm Huawei Technologies said Monday that it would wait for a decision from President Obama before it acts on a U.S. national security panel’s recommendation that it divest 3Leaf Systems, a small U.S. technology firm that Huawei bought out of bankruptcy in May. Huawei, which recently claimed the rank of the world’s second-largest supplier of telecommunications equipment, acquired 3Leaf—a start-up provider of server technologies—without first notifying the Committee on Foreign Investment in the United States (CFIUS).

FairPoint Communications’ 2008 purchase of New England landlines from Verizon Communications is the subject of a $2 billion fraudulent transfer lawsuit, filed late last week by a litigation trust formed by FairPoint creditors, who claim that the $2.3 billion acquisition forced FairPoint into bankruptcy just 18 months later. North Carolina-based FairPoint, which emerged from bankruptcy in January but continues to struggle financially, provides wireline telephony and Internet services to nearly two million customers in 18 states.

Utility Services—Darby v. Time Warner Cable, Inc. (In re Darby), No. 05-20931 (5th Cir., Nov. 14, 2006)

The U.S. Court of Appeals for the Fifth Circuit has held, in an issue of first impression in the circuit, that a cable service provider was not a utility under section 366 of the Bankruptcy Code. Therefore, the cable company was not obligated to provide services to a bankrupt debtor, even though the debtor offered assurances of future payment. The ruling affirmed the holdings of two lower courts.

Can the nondebtor party to an executory contract withhold services to the debtor postpetition if the debtor breached the contract prepetition?

Many view this as a settled area of bankruptcy law, and believe that the answer is “no” as long as the debtor is performing postpetition. Commentators of this view question how a debtor could ever reorganize if nondebtors did not have to perform under contracts postpetition, particularly if the debtor’s business is entirely dependant upon the contract at issue.

WorldSpace, a key provider of satellite radio services to customers living in ten European, African and Asian nations, filed for Chapter 11 protection last Friday before the U.S. Bankruptcy Court in Wilmington, Delaware, listing assets of $307.4 million against debts of $2.12 billion.

On January 6, 2009, the United States Court of Appeals for the Second Circuit rendered a decision in the case of Riker, Danzig, Scherer, Hyland & Perretti v. Official Comm. of Unsecured Creditors (In re: Smart World Tech., LLC) that clarifies the implications of a bankruptcy court's "pre-approval" of the terms of a professional's retention by the bankruptcy estate under Sections 327 and 328 of the Bankruptcy Code.