The ability to sell an asset in bankruptcy free and clear of liens and any other competing “interest” is a well-recognized tool available to a trustee or chapter 11 debtor in possession (“DIP”). Whether the category of “interests” encompassed by that power extends to potential successor liability claims, however, has been the subject of considerable debate in the courts. A New York bankruptcy court recently addressed this controversial issue in Olson v. Frederico (In re Grumman Olson Indus., Inc.), 445 B.R. 243(Bankr. S.D.N.Y. 2011).
A recent decision from the Bankruptcy Court of the Southern District of New York has rendered the enforcement of reclamation claims that arose 20 days prior to the bankruptcy filing almost impossible in cases in which there is a prepetition lien on inventory.
In In re Dana Corp., 2007 WL 1199221 (Bankr. S.D.N.Y. Apr. 19, 2007) there was $300 million in reclamation claims asserted, but the debtor estimated that valid reclamation claims totaled only approximately $3 million.
Part One of this article, published in the last edition of the Restructuring Review, examined recent developments in the gaming industry, focusing on strategies employed by gaming companies to increase liquidity and avoid insolvency. Part Two focuses on how potential buyers can use the bankruptcy process to purchase gaming facilities, free and clear of prior liens, and describes certain complications inherent in the acquisition of this type of asset.
Acquiring Gaming Facilities through Chapter 11
Sale Process
On Thursday, August 6, 2009, the United States Senate confirmed Justice Sonia Sotomayor to the Supreme Court of the United States. As a former Judge on the Court of Appeals for the Second Circuit, Judge Sotomayor’s jurisprudence includes a number of decisions involving noteworthy bankruptcy cases. This article provides a brief survey of these decisions.
This article sets out the potential impact in the BVI and Cayman of the much anticipated Supreme Court decision in Rubin v. Eurofinance SA [2012] UKSC 46, which was handed down on 24 October 2012. Rubin deals with the issue of whether orders made in Chapter 11 bankruptcy proceedings in the United States can be enforced as judgments of the English Courts.
COMPETING SETS OF RULES AND PRINCIPLES
The ability of a trustee or chapter 11 debtor in possession (“DIP”) to sell bankruptcy estate assets “free and clear” of competing interests in the property has long been recognized as one of the most important advantages of a bankruptcy filing as a vehicle for restructuring a debtor’s balance sheet and generating value. Still, section 363(f) of the Bankruptcy Code, which delineates the circumstances under which an asset can be sold free and clear of “any interest in such property,” has generated a fair amount of controversy.
The ability to sell an asset in bankruptcy free and clear of liens and any other competing “interest” is a well-recognized tool available to a trustee or chapter 11 debtor in possession (“DIP”). Whether the category of “interests” encompassed by that power extends to potential successor liability claims, however, has been the subject of considerable debate in the courts. A New York bankruptcy court recently addressed this controversial issue in Olson v. Frederico (In re Grumman Olson Indus., Inc.), 445 B.R. 243(Bankr. S.D.N.Y. 2011).
The collapse of marine fuel trader OW Bunker & Trading A/S (“OW Bunker”) and its affiliates, in November 2014, has resulted in a blizzard of legal proceedings in the United States. Bunker suppliers and creditors of insolvent OW Bunker entities have sought to secure their claims by arresting vessels or proceeding directly against vessel owners and operators who contracted with OW Bunker entities to supply their vessels with bunkers.
A party with a statutory right to an admiralty claim in rem, which had issued its claim after the Admiralty court had ordered the sale of a vessel, did not lose its right to enforce the claim1. The claim in rem could be enforced against the sale proceeds provided that the person liable in personam was the beneficial owner of the sale proceeds.
Facts
Introduction