Under section 365(d)(4) of the Bankruptcy Code, an unexpired lease of nonresidential real property is automatically deemed rejected if a debtor-lessee does not assume such lease within 120 days of its bankruptcy filing, or within 210 days with court permission.
Voss v. Knotts et al.
In a concise, unpublished decision, the U.S. Court of Appeals for the Ninth Circuit affirmed a district court’s grant of summary judgment in favor of the defendants in a copyright suit on the grounds that the plaintiff lacked standing. Voss v. Knotts et al., Case No. 12-56168 (9th Cir., Apr. 8, 2014) (per curiam).
A recent ruling in the Chapter 11 case of Free Lance-Star Publishing limited the credit bidding rights of a secured creditor. The ruling has called into question the ability of the holder of secured debt to utilize such debt to acquire companies on a going concern basis in bankruptcy cases, particularly in instances where the debt was acquired at a discount for such expr
The Seventh Circuit has reversed the district court’s decision in the Sentinel matter and ruled that the Bankruptcy Court’s allowance of a pre-petition transfer and authorization of a post-petition transfer of assets by Sentinel to its FCM customers was permitted under the Bankruptcy Code. The District Court had previously avoided the $22.5 million pre-petition transfer of funds to FCM customers and the $297 million post-petition transfer of funds authorized by the Bankruptcy Court.
A brewing hot topic in bankruptcy law is how a Debtor deals with property that is collateral for a secured creditor which is surrendered but has not yet been legally foreclosed or repossessed by the creditor. The Debtor’s interest is obvious: to avoid accruing post petition obligations, such as taxes, insurance, and homeowner’s association dues.
In a ruling yesterday, Judge Christopher Sontchi of the United State Bankruptcy Court for the District of Delaware denied a motion by a bond trustee to transfer venue of the Dallas-based Energy Future Holdings from Wilmington, Delaware to the Northern District of Texas, citing broad support from many creditors for keeping the case before the Delaware court.
A recent decision by the U.S. District Court for the Western District of Washington found that certain distressed debt funds were not “financial institutions” under the definition of “Eligible Assignee” in the applicable loan agreement and thus were not entitled to vote on the debtor’s chapter 11 plan of reorganization. The District Court decision affirmed a bankruptcy court decision enjoining loan assignments to the funds and recently denied the funds’ motion to vacate the decision.”1
A nightmare scenario for a lender: you lend $1.2 million to a debtor to purchase equipment; you take a first priority security interest in the equipment; one day another company calls to tell you it purchased the equipment at a bankruptcy auction you never knew about, for 10-20% of what you’re owed; you try to overturn the sale, but cannot, because the sale is consummated and your appeal is now “statutorily moot.” Could this happen? It happened in a recent Oregon case.
Recent Developments in Bankruptcy and Restructuring
Volume 13 l No. 3 l May–June 2014 JONES DAY
Business
Restructuring
Review
Eighth Circuit Expands Subsequent New Value
Preference Defense in Cases Involving Three-Party
Relationships
Charles M Oellermann and Mark G. Douglas
A bankruptcy trustee or chapter 11 debtor-in-possession has the power under section
547 of the Bankruptcy Code to avoid a transfer made immediately prior to
bankruptcy if the transfer unfairly prefers one or more creditors over the rest of