In this post-trial decision, the Court of Chancery held that a company’s repurchase of senior notes from an insider approximately six months after returning to solvency did not violate the express or implied terms of the indenture, constitute a fraudulent transfer, nor give rise to fiduciary duty claims on which the creditor had standing to sue.
(Although it is not typically our practice to analyze personal bankruptcy cases if the issues do not also arise in corporate bankruptcy practice, we report on the decision discussed below because it involves the intersection of bankruptcy law and a particularly topical issue – same-sex marriages and domestic partnerships.)
In a recent bankruptcy case, Richard Lewiston unsuccessfully attempted to shelter his assets in the Lois and Richard Lewiston Living Trust (the “Trust”) from inclusion in his bankruptcy estate based on the Trust’s spendthrift provision. Here, the bankruptcy court looked to Michigan state law in applying the provisions of the Bankruptcy Code and concluded the Trust property was part of Lewiston’s bankruptcy estate.
Facts about the Trust:
Section 303(b)(1) of the Bankruptcy Code allows an involuntary petition to be filed by three or more creditors who hold non-contingent claims totaling at least $15,325 more than the liens on the debtor’s property. Those creditors then must prove that the debtor was generally not paying its debts as they came due within the guidelines
In a decision that surprised many, the United Stated Circuit Court of Appeals for the Tenth Circuit (the “10th Circuit Court of Appeals”) affirmed decisions finding that a payment made on account of a first time transaction between a debtor and creditor can qualify for the ordinary course of business defense under 11 U.S.C. § 547(c)(2).
When a bankruptcy case is dismissed for cause pursuant to section 1112(b) of the Bankruptcy Code, the effect of the dismissal on orders entered during the case is not always clear. A recent District of Delaware decision,
It is a basic feature of sales under section 363 of the U.S. Bankruptcy Code, that the purchaser takes free and clear of all claims and interests, such claims and interests attach to the proceeds of the sale in accordance with their priorities.
On September 8, 2015, a federal district court invalidated a portion of the Georgia post-judgment garnishment statute in Strickland v. Alexander, No. 1:12-CV-02735-MHS (N.D. Ga.). Senior Judge Marvin Shoob found that the statute was constitutionally deficient on due process grounds, insofar as it fails to require:
A divided panel of the U.S. Court of Appeals for the Third Circuit stayed the part of a bankruptcy court’s sale order that would have “stripped” a commercial tenant’s lease from the casino property being sold to a third party. In re Revel AC, Inc., 2015 WL 5711358 (3d Cir. Sept. 30, 2015) (2-1).