In a recent decision that will be of interest to capital and structured finance market participants,1 a bankruptcy court in the Southern District of New York found that nonrecourse noteholders of a structured finance vehicle were not eligible petitioners under § 303(b) of the Bankruptcy Code and therefore could not commence an involuntary bankruptcy case.
A bankruptcy judge in the Eastern District of California recently issued a decision that is sure to raise appellate eyebrows.
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In a case of significant importance to licensees of US intellectual property, the US Court of Appeals for the Fourth Circuit held in Jaffé v. Samsung Electronics Co. (In re Qimonda), Case No. 12-1802, 2003 WL 26478864 (4th Cir. Dec. 3, 2013) (“Jaffé”), that a bankruptcy court did not err by requiring that the protections of section 365(n) of the Bankruptcy Code apply with respect to a foreign debtor’s US intellectual property (“IP”) as a condition of granting the debtor’s foreign representative relief under chapter 15 of the Bankruptcy Code.
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The Bankruptcy Court for the Southern District of New York has held that a cross-affiliate netting provision in an ISDA swap agreement is unenforceable in bankruptcy. In the SIPA proceedings of Lehman Brothers Inc. (LBI), UBS AG (UBS) sought to offset UBS’s obligation to return excess collateral to LBI against claims purportedly owed by LBI to UBS subsidiaries, UBS Securities and UBS Financial Services.
Armed with an adjudicator’s decision and a TCC enforcement judgment, can a party issue a statutory demand for payment, even if the other party has a genuine and substantial cross claim against the sum awarded? No, said Judge Stephen Davies in Shaw v MFP. Neither the Construction Act nor the Scheme was intended to displace the position under the Insolvency Rules, which give the court discretion to set aside a statutory demand if the debtor appears to have a counterclaim, set-off or cross demand which equals or exceeds the debt in the statutory demand.
The Bankruptcy Court for the Southern District of New York (the “SDNY”) has been a longstanding epicenter of Chapter 11 filings. Historically seen as one of the more pro-debtor forums in the country, large companies often filed in the SDNY to take advantage of that stance. Some debtors appear to have attempted to direct their cases to specific judges within the district who were seen as particularly pro-debtor. One recent example was the bankruptcy filing by OxyContin producer, Purdue Pharma.
Fallout continues from the November 2020 bankruptcy sale of Town Sports’ assets to a new entity backed, in part, by an ad hoc group of Town Sports’ prepetition lenders.