Early last week PricewaterhouseCoopers Inc., in its capacity as trustee in bankruptcy for Sequoia Resources Corp., filed a statement of claim against Perpetual Energy Inc., attempting to unwind an asset sale from Oct. 1, 2016. Alternatively, PwC is seeking $217-million in damages. Along with Perpetual, PwC has named certain subsidiaries and its CEO, Susan Riddell Rose, as defendants.
In its statement of claim, the plaintiff is relying upon legal principles associated with oppression, reviewable transactions in insolvencies and regulatory law in support of its action.
HIGHLIGHTS:
In a recent opinion, United States Bankruptcy Judge Martin Glenn of the Southern District of New York held that Bankruptcy Courts may enter final default judgments against non-US defendants who fail to respond to a properly served summons and complaint.
The Bottom Line
The Third Circuit, in a nonprecedential opinion in FBI Wind Down, Inc. Liquidating Trust v. Heritage Home Group, LLC (In re FBI Wind Down Inc.), Case No. 17-2315 (3d Cir. July 27, 2018), recently held that the bankruptcy court retained jurisdiction over the parties’ dispute that centered on the definition of terms in a court-approved asset purchase agreement because the claims fell outside the scope of an arbitration provision in the agreement.
What Happened?
New Decision Affects D&O Liability
A recent federal bankruptcy court decision addresses important principles of fiduciary conduct (and the benefits of a state exculpatory statute) in the context of a financially distressed not-for-profit hospital.
Creditors often think that an involuntary bankruptcy petition is a great bargaining chip when faced with a recalcitrant debtor. However, the actual filing of an involuntary bankruptcy petition (when that petition is filed in “bad faith”) confers a considerable risk to the petitioning creditors. Recently, the United States Court of Appeals for the Third Circuit issued an opinion that re-emphasizes just how risky bad faith involuntary petitions can be for creditors.
The Bottom Line
On July 27, the U.S.
Here’s an aggregation of 28 of my Twitter posts from the beginning of July 2018, with links to cases, articles, and news briefs that restructuring professionals should find of interest. Thanks for reading!
LIFE, BUSINESS, AND THE WORLD GENERALLY:
In In re Avanti Commc'ns Grp. PLC, 582 B.R. 603 (Bankr. S.D.N.Y. 2018), Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York entered an order under chapter 15 of the Bankruptcy Code enforcing a scheme of arrangement sanctioned by a court in England that included nonconsensual third-party releases. Judge Glenn determined that such releases should be recognized and enforced consistent with principles of "comity" and cooperation with foreign courts inherent under chapter 15.