Senior lenders often insist that subordinate lenders assign to them, under subordination and intercreditor agreements, their right to vote on a plan of reorganization proposed for the borrower should it end up in chapter 11.  The intention of such assignments is to prevent junior lenders from facilitating or preventing confirmation of bankruptcy plans contrary to the desires of senior lenders.  Lenders should be aware, however, that courts disagree whether such plan voting rights assignments are enforceable.  In fact, the United States Bankruptcy Court for the District of Mas

IN RE: RESOURCE TECHNOLOGY CORP. (OCTOBER 31, 2011)

Can a U.S. patent licensee whose license has been rejected by a licensor under foreign law in a foreign bankruptcy rely on the protections of § 365(n) of the U.S. Bankruptcy Code? On October 28, 2011, the United States Bankruptcy Court for the Eastern District of Virginia issued an opinion addressing this in the Chapter 15 case of Qimonda AG (“Qimonda”).⁵ The bankruptcy court held that the application of § 365(n) to executory licenses to U.S. patents was required to sufficiently protect the interests of U.S.

• On December 20, 2011, the South Carolina Public Service Commission (SC PSC) issued a scheduling order for AT&T South Carolina’s complaint against Halo Wireless. AT&T alleges that Halo, which filed for bankruptcy protection after AT&T initiated this action and similar complaints in several other states, was sending AT&T landline-originated traffic but refused to pay terminating access charges. AT&T also alleges that Halo has been manipulating call signaling information to hide the traffic’s true origin and to make it appear as wireless-originated traffic.

Northern Capital, Inc. v. The Stockton National Bank, et al. (In re Brooke Corporation), 2011 WL 4543484 (Bankr. D. Kan. Sept. 28, 2011)

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The U.S. Supreme Court has agreed to settle the dispute as to whether secured creditors can credit bid in connection with asset sales done pursuant to liquidating plans. The Third Circuit in the Philadelphia Newspapers case and the Fifth Circuit in the Pacific Lumber case held that secured creditors do not have a statutory right to credit bid their debt at a sale conducted under a plan of reorganization pursuant to which the debtor elects to provide the secured creditors with the “indubitable equivalent” of their secured claim.

In re SUD Properties, Inc., Case No. 11-03833-8-RDD (Bankr. E.D.N.C. Aug. 23, 2011)  

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Judge James M. Peck of the United States Bank-ruptcy Court for the Southern District of New York on December 8, 2011 issued an opinion on a motion of the Lehman Brothers Inc. (“LBI”) trustee (“Trustee”) to confirm his determination that certain claims relating to settled on delivery-versus-payment “to be announced” (“TBA”) contracts do not qualify as customer claims against the LBI estate and therefore are not entitled to Securities Investor Protection Act (“SIPA”) coverage.

In the Matter of Richard Louis Alexander (7th Cir., 2011) U.S. App. LEXIS 17110, (August 16, 2011)

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Whittle Development, Inc. v. Branch Banking & Trust Co. et al. (In re Whittle Development Inc.) 2011 WL 3268398 (Bankr. N.D. Tex., July 27, 2011)  

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