In an August 2016 decision in the Aéropostale bankruptcy case,1 the Bankruptcy Court for the Southern District of New York held that allegations of insider trading did not justify equitable subordination and were not “cause” to deny a credit bid. The decision helps bridge the gap between the treatment of insider trading allegations in bankruptcy court and their treatment everywhere else.
(Bankr. S.D. Ind. Oct. 19, 2016)
The bankruptcy court enters judgment in favor of the plaintiff in this adversary proceeding arising from a transaction involving the sale of a restaurant and associated assets. The court finds that rights in the purchase agreement were effectively assigned to the plaintiff, and the purchase agreement should be reformed to reflect the proper selling party. Further, the court finds that various defendants are liable to the plaintiff on breach of warranty, conversion, and other claims. Opinion below.
Judge: Lorch
A recent decision by the United States Bankruptcy Court for the Western District of Texas in In re Sanjel (USA) Inc.,et al., Case No. 16-50778-CAG (Bankr. W.D. Tex. July 29, 2016) explains that in a Chapter 15 case, the U.S. bankruptcy court will not always apply the law of the foreign jurisdiction to U.S. creditors and U.S.-based claims.
Rated and other debt issuances are often structured with borrowers that are special purpose entities, whose governance provisions are designed to inhibit bankruptcy filings. A recent District of Delaware bankruptcy court case, while not directly on point, throws into question the premises underlying the efficacy of such provisions.
Facts
The U.S. District Court for the Middle District of Florida, Orlando Division recently ruled that debtors’ FCCPA and TCPA claims did not arise out of and were not related to their mortgage to fall under the jury waiver provisions in the mortgage where the claims arose out of attempts to enforce a debt that was discharged in bankruptcy.
The Court also ruled the debtors sufficiently stated a claim under FCCPA by alleging the creditor received notice of the debtors’ bankruptcy case to constitute actual knowledge the debtors’ were represented by counsel.
As many investors anticipated, the deep trough in the commodities market over recent years resulted in a number of companies in commodity industries restructuring their balance sheets through a Chapter 11 bankruptcy process. Because companies often reorganize in the midst of a market downturn, a commodity company’s low EBITDA during this time usually results in low values being placed on the company’s reorganized equity.
On October 11, 2016, the Supreme Court of the United States granted cert in Midland Funding, LLC v. Johnson, No. 16-348 (Oct. Term 2016) to resolve a split among the Circuits as to the FDCPA’s prohibition against deceptive collection practices in the context of filing proofs of claim for debts where a collection action would otherwise be time-barred.
Recently, the U.S. Court of Appeals for the Sixth Circuit issued an opinion in the Chapter 7 bankruptcy case Bash v.
In a recent memorandum decision, Judge Robert S. Bardwil of the United States Bankruptcy Court for the Eastern District of California sanctioned a Sacramento attorney and ordered him to complete a local e-filing course because he did not maintain copies of filed documents that included the original “wet” signature.
Key points:
While DIP Lenders rightfully negotiate for super-priority administrative expenses which trump post conversion chapter 7 administrative expenses, these provisions are not uniformly enforced.
DIP Lenders should require the inclusion of specific language providing that section 364(c)(1) super-priority claims have priority over chapter 7 administrative expense claims, including those to be incurred by a chapter 7 trustee above the agreed upon “burial expenses.”