To the extent authorized by a State, Chapter 9 of the Bankruptcy Code allows municipalities (defined as a “political subdivision or public agency or instrumentality”) of that State – including public hospitals – to reorganize their debts in the face of insolvency. Municipalities achieve this goal through implementation of a court-approved plan of adjustment. Although the standards for confirming (approving) a Chapter 9 plan resemble the well-established standards for confirming a Chapter 11 plan, differences exist.
On November 5, 2015, the United States Bankruptcy Court for the Northern District of California issued a “Memorandum re Plan Confirmation” in In re Bowie, Case No. 15-10144 (Bankr. N.D. Cal. Nov.
An overvalued property may now have a bigger impact on a secured creditor’s bottom-line during bankruptcy. Splitting with the Seventh Circuit, the Fifth Circuit in Southwest Securities, FSB v.
The court overseeing the liquidation of Reliance Insurance Company, one of the largest insurance liquidations in history, has approved the liquidator’s request for a final claims bar date of March 31, 2016. Reliance’s current payment percentage is 65%, so any insured with a significant coverage claim against Reliance should ensure that it files a proof of claim and provides the requisite supporting information by the bar date. If your company needs assistance in determining whether you have a valid claim against Reliance or in filing and documenting a claim, our firm can help.
A Chapter 11 debtor’s impairment in its reorganization plan of two unsecured claims filed by its former lawyer and accountant “was transparently an artifice to circumvent the purposes of” the Bankruptcy Code (“Code”), held the U.S. Court of Appeals for the Sixth Circuit on Jan. 27, 2016. In re Village Green I G.P., 2016 WL 325163, at *2 (6th Cir. Jan. 27, 2016).
Employers scored a big victory in In re Trump Entertainment Resorts, a case of first impression in the Third Circuit, which held that a debtor-employer can terminate their obligations under an expired Collective Bargaining Agreement (CBA) and implement the terms of a final offer.
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Lending credence to the old adage “if it’s too good to be true, then it probably is,” the Seventh Circuit Court of Appeals recently held that a secured lender was on inquiry notice of possible fraud by its borrower in impermissibly pledging customers’ assets to secure loans. And the penalty was steep—the Court determined the pledge to be a fraudulent transfer to the lender and the lender’s failure to act upon inquiry notice destroyed the lender’s good faith defense. As a result, the lender’s $300 million secured claim was reduced to a near-worthless general unsecured claim.
(Bankr. E.D. Ky. Feb. 12, 2016)
The U.S. Bankruptcy Court for the Southern District of Florida recently denied a mortgagee’s motion to reopen a Chapter 7 case to compel the surrender of real property, due to a five-year delay in filing the motion.
In so ruling, the court agreed with an earlier ruling from the U.S. Bankruptcy Court for the Middle District of Florida (In re Plummer, 513 B.R. 135 (Bankr. M.D. Fla. 2014)), distinguishing “surrender” from “foreclosure,” and holding that a creditor cannot use the Bankruptcy Code to circumvent the obligations imposed by state law.
Individuals may want to think twice before seeking relief under chapter 11 following a recent decision from the Ninth Circuit Court of Appeals. In Zachary v.