Navigating the most recent leg in the Quebecor regatta, the Second Circuit affirmed the judgment of the district court and ruled that prepetition transfers made in connection with a securities contract may qualify for safe harbor from avoidance actions under section 546(e) of the Bankruptcy Code—even if the transferee is a mere “conduit” or “intermediary” financial institution. In re Quebecor World (USA) Inc. (Official Committee of Unsecured Creditors of Quebecor World (USA) Inc. v. American United Life Insurance Co.), No. 12-4270-bk (2d Cir. June 10, 2013).
The United States District Court for the Middle District of Pennsylvania has held that an E&O policy issued to a now-bankrupt credit counseling company did not cover claims arising under unfair trade practices statutes, but did cover claims arising under fair debt collection statutes. Hrobuchak v. Fed. Ins. Co., 2013 WL 2291875 (M.D. Pa. May 24, 2013). The court also held that carve-outs from the policy’s definition of loss did not preclude coverage for statutory damages or damages representing the return of fees paid to the insured.
Dill Oil Company, LLC v. Stephens, No. 11-6309 (10th Cir., Jan. 15, 2013)
CASE SNAPSHOT
The Court of Appeals for the Tenth Circuit, in a case of first impression before the court, joined the Fourth Circuit in holding that the absolute priority rule remains applicable in individual chapter 11 cases.
FACTUAL BACKGROUND
On a matter of first impression, the Fourth Circuit issued an opinion in the Derivium Capital, LLC bankruptcy case on May 24, 2013,1 affirming the District Court’s ruling that Grayson Consulting Inc. ("Grayson"), the chapter 7 Trustee’s assignee, could not avoid as fraudulent conveyances Wachovia’s2 commissions, fees, and margin interest payments because those payments were protected from recovery by the safe harbor of United States Bankruptcy Code (the "Bankruptcy Code") section 546(e).
Secured lenders often resort to non-judicial foreclosure sales of personal property upon a borrower’s default. Article 9, Part 6 of the Uniform Commercial Code requires that every aspect of such a sale must be commercially reasonable. However, the courts have historically provided little guidance as to what exactly constitutes a commercially reasonable sale. Fortunately, the Delaware Chancery Court recently issued a decision, entitled Edgewater Growth Capital Partners, L.P. v. H.I.G. Capital, Inc., C.A. No. 3601-CS (Del.Ch. Apr.
Patriot Coal became the third major debtor in the last year to modify benefits or reject a CBA under sections 1113 and 1114 of the Bankruptcy Code. Following similar rulings in the Hostess and AMR Corporation bankruptcies, Bankruptcy Judge Kathy Surratt-States on May 29, 2013, granted Patriot authorization to modify agreements with the United Mine Workers of America and reject union CBAs.
In In re East End Development, LLC, 2013 WL 1820182 (Bankr. E.D.N.Y. Apr.
In In re Village at Lakeridge, LLC, BAP Nos. 12-1456, 12-1474 (B.A.P. 9th Cir. Apr. 5, 2013), the Bankruptcy Appellate Panel of the Ninth Circuit clarified that, in order to apply the common interest doctrine, a trial court must make a finding that the parties expressly or implicitly agreed to participate in a joint legal strategy. In this case, secured creditor, US Bank, deposed the sole unsecured creditor, Rabkin.
You have almost certainly heard the phrase, “Waiting with bated breath.” As in: we awaited the Red Wedding scene in Game of Thrones with bated breath. Or: we greeted the Drug and Device Law Son's diploma ceremony with bated breath. (The former was impressive and awful. As one friend wrote on his Facebook wall, if you had a favorite character in GoT, maybe now you don't.