The Sixth Circuit recently held that Baker Botts, L.L.P. v. ASARCO, L.L.C., 135 S. Ct. 2158 (2015) does not apply to contempt sanctions. Baker Botts stands for the proposition that the general American Rule (i.e., each party is responsible for paying its own attorneys’ fees) applies in the normal course of bankruptcy proceedings, preventing courts from awarding attorneys’ fees incurred for defending fee applications filed pursuant to section 330 of the Bankruptcy Code.
The U.S. Court of Appeals for the Seventh Circuit recently held that a mortgagee’s failure to take a deficiency judgment against a borrower who filed bankruptcy in a concluded state foreclosure action precluded the mortgagee from making a deficiency claim in the borrower’s bankruptcy proceeding.
A copy of the opinion in BMO Harris Bank N.A. v. Anderson is available at: Link to Opinion.
Since 2012, ten states and the District of Columbia have legalized marijuana for adult recreational use.
In 2018, approximately 40 companies in the oil and gas industry filed bankruptcy in the United States, including companies engaged in exploration and production, oilfield services, and midstream services.
It is an understatement to say that questionable collateral descriptions in Uniform Commercial Code (“UCC”) financing statements have spawned much litigation over many years. The drafters of the UCC have refined the law of secured transactions in attempt to provide clear guidance to lenders and borrowers on the correct manner to describe collateral in a financing statement. To be blunt, it does not take a great deal of skill or legal acumen to correctly prepare a financing statement, particularly with respect to providing a legally sufficient collateral description.
Those who file UCC records often provide the required collateral description on an attached schedule or exhibit rather than the designated field on the financing statement. This well-established and accepted practice can save time in the filing process and reduce transcription errors. When providing the description using an attached document, the financing statement collateral field will typically incorporate the document by reference using words such as “See Schedule A attached” or words to that effect.
On January 17, 2019, the United States Court of Appeals for the Fifth Circuit issued a decision holding that “impairment” under a plan of reorganization does not arise even if a creditor is paid less than it would be entitled to under its contract, so long as the reduced recovery is due to the plan’s incorporation of the Bankruptcy Code’s disallowance provisions.
The retail sky is falling. At least that is how it appears from recent and unprecedented number of retailers filing for bankruptcy. From iconic stores such as Sears and Toys ‘R’ Us, to department stores such as Bon Ton, to mall stores including Brookstone, The Rockport Company, Nine West, among others. The reasons given for such filings vary as much as their products but one theme seems to be constant — the inability of retailers to maintain “brick and mortar” operating expenses in the era of online shopping.
This is a favorable decision for commercial secured lenders. Although the ruling is not controlling on other bankruptcy courts as it is a trial court level ruling, courts may certainly consider it when presented with similar issues.
In In re 1111 Myrtle Avenue Group, LLC (Bankr. S.D.N.Y. 2019), a New York bankruptcy court held that a default interest rate provision of 7 percent was enforceable and not a penalty against a debtor, which retained significant equity postbankruptcy.
Background
In Kaye v. Blue Bell Creameries, Inc. (In re BFW Liquidation, LLC), 899 F.3d 1178 (11th Cir. 2018), the U.S. Court of Appeals for the Eleventh Circuit broadened the scope of section 547(c)(4) of the Bankruptcy Code’s "subsequent new value" defense against preference actions by holding that the provision applies to all new value supplied by the creditor during the preference period and not merely to new value that remains unpaid on the bankruptcy petition date.