In re Marcal Paper Mills, Inc., No. 09-4574, 650 F.3d 311 (3d Cir., 2011)

CASE SNAPSHOT

Sprint Nextel Corporation v. U.S. Bank N.A. (In re TerreStar Networks, Inc.), Case No. 10-15446 (Bankr. S.D.N.Y., Aug. 19, 2011)

CASE SNAPSHOT

In the course of the next few weeks, Omega Navigation Enterprises, Inc. and its affiliates (collectively, “Omega”), an international shipping enterprise, will find out if motions by certain of their lenders to, among other things, dismiss Omega’s chapter 11 bankruptcy proceedings have been granted by the U.S. Bankruptcy Court for the Southern District of Texas.¹ If not, then Omega may be permitted to continue its attempt to reorganize its business under chapter 11 of the Bankruptcy Code.

The District Court in Manhattan seems to have put the nail in the coffin of triangular set-off in insolvency – that is, the ability of affiliates to set off their claims against an insolvent debtor: In re Lehman Brothers Inc. (SDNY, 4 October 2011).

The United States Bankruptcy Court for the Southern District of New York issued a memorandum decision in the Lehman Brothers Inc. (LBI) liquidation proceeding confirming the LBI trustee’s determination that certain claims relating to TBA contracts do not qualify as customer claims against LBI’s estate.

Lehman Brothers Holdings, Inc. v. Bethany Holdings Group, LLC, et al., 2011 WL 3427013, (S.D.N.Y. Aug. 5, 2011)

CASE SNAPSHOT

Sandburg Financial Corp. v. American Rice, Inc. (In the Matter of American Rice, Inc.), No. 11-40301 (5th Cir., Sept. 22, 2011)

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Official Committee of Unsecured Creditors v. Baldwin (In re Lemington Home for the Aged), No. 10-4456 (3d Cir., Sept. 21, 2011)

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A federal district court, applying Pennsylvania law, has held that the insolvency exclusion in an insurance agency’s professional liability policy excused the insurer from the duty to defend the agency in lawsuits alleging that it had caused employee benefit plans that it created to be underfunded.  ACE Capital Limited v. Morgan Waldon Ins. Management, LLC, Civil Action No. 11-128, 2011 WL 5914275 (W.D. Pa. Nov. 28, 2011).

An English appellate court permitted an Australian reinsurer in liquidation to enforce a judgment entered in Australian insolvency proceedings against a Lloyd’s syndicate, which had elected not to participate in the foreign proceedings. On appeal, the syndicate argued that England’s reciprocity act did not apply to foreign judgments made in insolvency proceedings, and that England’s insolvency act, which recognizes Australian courts, should be interpreted as strictly permitting only Australian choice of law, rather than the enforcement of Australian judgments.