WHAT IS FATCA?

On October 12, the Honorable Robert D. Drain, U.S. Bankruptcy Judge for the Southern District of New York, issued his final decision from the bench in the bankruptcy cases of supermarket chain Tops Holdings II Corporation (“Tops”). The decision came in an adversary proceeding seeking to avoid four dividend payments totaling $375 million from 2009–2013 paid to the Tops’ private equity investors (the “PE Group”) as constructive and actual fraudulent transfers and also hold the director-defendants responsible for breaching their fiduciary duties.

The massive FTX bankruptcy has rattled the crypto industry. While it may take some time for investors, investigators, and customers to learn what happened in the lead up to FTX’s demise, it seems already clear that many FTX customers will lose cryptocurrency and other digital assets (“Tokens”) they had deposited in FTX trading accounts. News reports suggest that those losses are the result of FTX’s related trading arm, Alameda Research, having borrowed FTX customer deposits using FTX’s proprietary token as collateral at an inflated valuation.

Part I: Introduction and Background Cryptoassets & Insolvency 2 Introduction Cryptoassets have emerged from relative obscurity to become an increasingly significant and mainstream presence: in just five years the global market cap for cryptocurrencies rose from around $15bn to over $3tn at its peak in November of last year.

Pension issues in the American Airlines (AMR) bankruptcy¹ have resulted in the Internal Revenue Service (IRS) issuing new final regulations, effective November 8, 2012 (Final Regulations), which broadly impact all debtors facing underfunded pension plan obligations. The Final Regulations provide chapter 11 bankruptcy debtors facing distress terminations of their tax-qualified defined benefit pension plans with the additional option of amending the plans to eliminate accelerated payment options.

VE Vegas Investors IV LLC and others vs Shinners and others [2018] EWHC 186 Ch

Background

The applicants were creditors of VE Interactive Limited (In administration) (“VE”). VE encountered financial difficulties and its directors sought insolvency advice from insolvency practitioners at Smith and Williamson (“S&W”) and appointed them to advise on and effect a pre-pack sale of VE’s business and assets.

The bankruptcy courts have a long history of being willing to use their judicial power under the Bankruptcy Code to prevent perceived efforts by debtors to inappropriately shield their assets from creditors. This is true even when the debtors employ structures and devices that are complex and crafted in seeming compliance with applicable law.

Note — This post (plus many others) arrives thanks to the hard work of Sixth Circuit Appellate Blog intern extraordinaire Barrett Block, a rising 3L at UK Law.

A majority of today’s large Chapter 11 cases are structured as quick Section 363 sales of all the debtor’s assets followed by confirmation of a plan of liquidation, dismissal of the case, or a conversion to a Chapter 7. The purchaser in the sale is often one of the debtor’s prepetition secured or undersecured lenders, which may also act as the debtor-inpossession (DIP) lender and purchase the debtor’s assets through a credit bid, with no cash consideration.

The U.S. Supreme Court’s October 2010 Term (which extends from October 2010 to October 2011, although the Court hears argument only until June or July) officially got underway on October 4, three days after Elena Kagan was formally sworn in as the Court’s 112th Justice and one of three female Justices sitting on the Court.