Valuation is a critical and indispensable part of the bankruptcy process. How collateral and other estate assets (and even creditor claims) are valued will determine a wide range of issues, from a secured creditor's right to adequate protection, postpetition interest, or relief from the automatic stay to a proposed chapter 11 plan's satisfaction of the "best interests" test or whether a "cram-down" plan can be confirmed despite the objections of dissenting creditors.
Under the "single-satisfaction rule," although a bankruptcy trustee or a chapter 11 debtor-in-possession ("DIP") may seek to avoid and recover avoidable transfers of a debtor's property from more than one transferee, the aggregate recovery is limited to the value of the property transferred. The U.S. Court of Appeals for the Second Circuit examined this rule in Jones v. Brand Law Firm PA (In re Belmonte), 931 F.3d 147 (2d Cir. 2019).
After discussions among judges from several jurisdictions, including Argentina, Australia, Bermuda, the British Virgin Islands, Canada, the Cayman Islands, England and Wales, Singapore, and the United States, at the initial meeting of the Judicial Insolvency Network (the "JIN") in October 2016, the JIN developed Guidelines for Communication and Cooperation Between Courts in Cross-Border Insolvency Matters (the "Guidelines").
Developing bankruptcy, insolvency and restructuring law will greatly boost investment prospects for ASEAN countries; Singapore is already leading regional push
Legal scholars and practitioners from around the globe gathered in Singapore earlier this month to discuss the development of bankruptcy, insolvency, and restructuring law in the ASEAN region.
On August 20, 2018, the National Bankruptcy Conference (the "NBC") submitted a letter (the "Letter") to representatives of the House Subcommittee on Regulatory Reform and the House Committee on the Judiciary that proposed certain technical and substantive amendments to chapter 15 of the Bankruptcy Code. Chapter 15, which is patterned on the 1997 UNCITRAL Model Law on Cross-Border Insolvency (the "Model Law"), was enacted in 2005 and establishes procedures governing cross-border bankruptcy and insolvency proceedings. To date, the Model Law has been enacted by the U.S.
In U.S. Capital Bank N.A. v. Village at Lakeridge, LLC, 2018 WL 1143822, No. 15-1509 (U.S. Mar. 5, 2018), the U.S. Supreme Court held that an appellate court should apply a deferential standard of review to a bankruptcy court’s decision as to whether a creditor is a "nonstatutory" insider of the debtor for the purpose of determining whether the creditor’s vote in favor of a nonconsensual chapter 11 plan can be counted.
In Momentive Performance Materials Inc. v. BOKF, NA (In re MPM Silicones, L.L.C.), 2017 BL 376794 (2d Cir. Oct. 27, 2017) ("Momentive"), the U.S. Court of Appeals for the Second Circuit, in a long-anticipated decision, affirmed a number of lower court rulings on hot-button bankruptcy issues, including allowance (or, in this case, denial) of a claim for a "make-whole" premium and contractual subordination of junior notes.
Section 510(b) of the Bankruptcy Code provides a mechanism designed to preserve the creditor/shareholder risk allocation paradigm by categorically subordinating most types of claims asserted against a debtor by equityholders in respect of their equity holdings. However, courts do not always agree on the scope of this provision in attempting to implement its underlying policy objectives. In In re Lehman Brothers Holdings Inc., 2017 WL 1718438 (2d Cir.
On February 1, 2017, the Supreme Court of Singapore and the U.S. Bankruptcy Court for the District of Delaware announced that they had formally implemented Guidelines for Communication and Cooperation between Courts in Cross-Border Insolvency Matters (the "Guidelines"). The U.S. Bankruptcy Court for the Southern District of New York adopted the Guidelines on February 17, 2017.
On February 8, 2017, the U.S. District Court for the Western District of Oklahoma dismissed the class action lawsuit brought by unsecured bondholders of Chesapeake Energy Corporation ("Chesapeake"), adopting the so-called narrow reading of Section 316(b) of the Trust Indenture Act of 1939 ("TIA").[1]