A recent decision by the Second Circuit underscores the importance to debt collectors of accurately describing the options available to a student loan borrower in bankruptcy, even a borrower who previously filed but did not seek the determination of undue hardship that would have been a necessary predicate to any discharge.
In an important recent decision, United States v. Quality Stores, Inc., et al.,1 in which Pepper represented the prevailing party, the U.S. Court of Appeals for the Sixth Circuit held that supplemental unemployment compensation benefits (SUB payments) paid by a bankrupt company to its former employees were not wages subject to taxation under the Federal Insurance Contributions Act (FICA).
On August 29, 2012, Contec Holdings, Ltd ("Contec") and various related entities filed chapter 11 petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware. Simultaneous with filing its bankruptcy petitions, Contec also filed with the Bankruptcy Court a declaration of the company's Chief Restructuring Officer in support of its first day motions (the "Declaration"). Contec was started in 1978 and provides repair services for cable and broadband operators. The company services equipment such as cable set-tops, modems and satellite receivers.
On September 11, 2012, Digital Domain Media Group and various related entities (collectively, "Digital Domain") filed chapter 11 petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware. Digital Domain filed several "first day" pleadings with the Bankruptcy Court, one of which is the Declaration of Digital Domain's Chief Restructuring Officer in Support of First Day Motions (the "Declaration"). As set forth in the Declaration, Digital Domain provi
Judge Martin Glenn of the Bankruptcy Court for the Southern District of New York recently ruled that Borders gift card holders did not qualify as “known creditors.” The Court concluded that the gift card holders were entitled only to publication notice rather than actual notice of the bar date for filing bankruptcy claims in Borders’ chapter 11 case.
The United States Court of Appeals for the Eighth Circuit held on Aug. 3, 2012, that equitable considerations could not prevent a creditor's recouping amounts owed to it by a chapter 7 debtor. Terry v. Standard Ins. Co. (In re Terry), 2012 WL 3139364, *4 (8th Cir. Aug. 3, 2012). Reversing the bankruptcy court and the Bankruptcy Appellate Panel ("BAP"), the Eighth Circuit explained that "once a party meets the same-transaction test . . . a court should not impose an additional 'balancing of the equities' requirement" on the doctrine of recoupment. Id.
On June 28, 2012, Judge Shira A. Scheindlin of the United States District Court for the Southern District of New York affirmed the order of the United States Bankruptcy Court for the Southern District of New York granting Ahapura Minechem Ltd.’s petition for recognition of its Indian insolvency proceeding as a foreign main proceeding under chapter 15 of the Bankruptcy Code. Armada v. Shah (In re Ashapura Minechem Ltd.), 2012 WL 2478467 (S.D.N.Y. June 28, 2012).
Judges Kevin Carey and Mary Walrath of the United States Bankruptcy Court for the District of Delaware issued opinions in In re Tribune Co.1 and In re JER/Jameson Mezz Borrower II, LLC2, respectively, that shake up the landscape for restructuring real estate investments with multiple layers of debt.