On September 16, HM Treasury published its third consultation on new insolvency arrangements for investment firms. The consultation sets out the government’s final proposals for a special administration regime (SAR) for investment firms.
In Rea v. Federal Investors (10-1440), the Third Circuit held that no private cause of action exists against a private employer that refused to hire an applicant because the applicant previously filed for bankruptcy. The appellant applied to an investment firm and, after an interview, the firm was seemingly poised to hire him. The investment firm, however, denied him employment because it discovered he filed bankruptcy seven years earlier. The appellant filed suit, claiming the firm violated federal law by discriminating against him on account of his prior bankruptcy.
The following is a list of some recent larger U.S. 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.
DINING
Giordano’s Enterprises Inc. filed for Chapter 11 bankruptcy along with 32 of its affiliates.
Garden Operations Realty LP, the parent of New York bagel manufacturer H&H Bagels, has filed for Chapter 11 protection.
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State Court Receiverships
When a retail business becomes a debtor in bankruptcy, it often decides to trim its operations by closing some of its retail stores. This strategy inevitably leaves the debtor with unnecessary leases. Instead of simply rejecting the leases, retail debtors often assume the agreements and assign them to other entities. The assumption and assignment of the unnecessary leases may allow a debtor to avoid potentially significant rejection damage claims from landlords.
On March 12, West Coast Life Insurance Co. added civil conspiracy and several violations of Florida law to a complaint alleging that an investment company, several insurance brokers and individual policyholders engaged in an illegal stranger-owned life insurance (STOLI) scheme. The amended complaint alleges that Park Venture Advisors masterminded and implemented the plan, which involved the sale of individual life insurance policies to private investors, while Wells Fargo Delaware Trust Co.
WILMINGTON, Del. – The State of Idaho’s Department of Finance has won approval for a court-appointed examiner in the closely watched bankruptcy proceedings of DBSI, Inc., an Idaho-based investment firm. Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware has given the examiner the authority to probe $2 billion in allegedly fraudulent securities transactions made by DBSI. The scheme involved more than 12,000 investors and 270 properties throughout the country.
Two D&O insurers have asked the U.S. Bankruptcy Court for the District of Minnesota to lift an automatic stay in a bankruptcy proceeding pending against their insureds so that the insurers can pursue their coverage defenses as counterclaims against the insureds in a pending declaratory judgment action.In Re Petters Company, Inc., et al., Case No. 08-45257 (Bankr. D. Minn.).
The U.S. Bankruptcy Court for the Southern District of Texas issued a stern warning to professional services providers regarding “tail fees,” establishing a presumption of unreasonableness against contract terms requiring fees not attached to tangible, identifiable and material benefits to the debtor’s estate.
In RGH Liquidating Trust v. Deloitte & Touche, LLP, 2011 WL 2471542 (N.Y.