On June 9, 2016, the New York State Court of Appeals, in Ambac Assur. Corp. v. Countrywide Home Loans, 2016 BL 184648 (N.Y. June 9, 2016), reversed a lower court decision, consistent with the overwhelming majority of federal court decisions, that the common interest doctrine under New York law is not limited to communications made in connection with pending or reasonably anticipated litigation.
(7th Cir. Sept. 14, 2016)
In Deutsche Bank Trust Co. Ams. v. Large Private Beneficial Owners (In re Tribune Co. Fraudulent Conveyance Litig.), 818 F.3d 98 (2d Cir. 2016), the U.S. Court of Appeals for the Second Circuit held that the “safe harbor” under section 546(e) of the Bankruptcy Code for settlement payments and for payments made in connection with securities contracts preempted claims under state law by creditors to avoid as fraudulent transfers pre-bankruptcy payments made to shareholders in connection with a leveraged buyout (“LBO”) of the debtor.
(Bankr. E.D. Ky. September 14, 2016)
While bankruptcy relief is available as a tool for individuals to discharge debts, it is not available to everyone, under all circumstances. Before a debtor can, for example, discharge debts in a Chapter 7 bankruptcy, he or she must prove that debts and income are within certain statutory thresholds. When determining whether an individual is eligible for relief, the nature of the debts at issue is also relevant.
A unanimous state Supreme Court ruling affords foreclosed upon borrowers standing to bring suit by showing that there has been an invasion of his/her legally protected interests. In 2006, homeowner Tsvetana Yvanova borrowed money and executed a deed of trust on a residential property. The lender and beneficiary of the trust deed, New Century, filed for bankruptcy in 2007 and was liquidated in 2008. Yvanova claimed that the trust deed was illegally assigned to a bank in 2011, after New Century dissolved, and that the deed was improperly assigned to an investment trust.
Just when courts appeared to be developing a consensus on how to value affordable housing projects in bankruptcy, an opinion from the 9th Circuit Court of Appeals has muddied the landscape. In In re Sunnyslope Housing Ltd.
Noble Environmental Power, LLC, and several of its affiliates filed for Chapter 11 protection in the Bankruptcy Court for the District of Delaware (Lead Case No. 16-12055). Noble, a renewable energy company that owns and operates wind generation assets in New York and Texas, has its principal place of business in Centerbrook, Connecticut. According to the Debtor’s first day affidavit, downward trends in energy prices have made its debt obligations untenable, leading to the commencement of this case.
A recent decision from the Southern District of New York may reopen a door — which many had believed was all but closed — for disgruntled creditors seeking to challenge failed leveraged buyouts (“LBOs”) as fraudulent conveyances. In In re Lyondell Chemical Co., 2016 WL 4030937 (S.D.N.Y. July 27, 2016), District Judge Denise Cote reinstated an intentional fraudulent conveyance claim seeking to claw back $6.3 billion in distributions made to Lyondell Chemical’s shareholders through an LBO that failed quickly and dramatically.