Don’t Go Chasing (Debtor-Affiliate) Waterfalls: Second Circuit Applies 510(b) Subordination to Contribution Claims Arising from the Securities of an Affiliate of a Debtor

In a decision with significant implications for investors and underwriters alike, the Court of Appeals for the Second Circuit has held that contribution claims arising from the purchase and sale of a security of an affiliate of the debtor can and should be subordinated under section 51

Filed under:
USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Debtor, Security (finance), Second Circuit
Location:
USA
Firm:
Weil Gotshal & Manges LLP
No Authorization? No Problem. Court Finds that Unauthorized Loan Is Entitled to Priority Status

In 

Filed under:
USA, New York, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Debtor, United States bankruptcy court
Location:
USA
Firm:
Weil Gotshal & Manges LLP
In Considering Motions to Sever, District Courts Might Effectively Shift the Burden to Plaintiffs to Show Why the Automatic Stay Should Not Be Extended to Nondebtor Defendants

“Round and around and around and around we go // Oh now tell me, now tell me, now tell me now you know // … It takes me all the way // I want [to extend the automatic] stay” – Rihanna (as modified)

Filed under:
USA, Louisiana, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP
Location:
USA
Firm:
Weil Gotshal & Manges LLP
Chapter 15 for all: SDNY bankruptcy court holds that indenture governed by New York law constitutes “property in the United States” under section 109(a)

Section 109(a) of the Bankruptcy Code requires debtors to either reside or have a domicile, place of business, or property in the United States.  A split of authority exists whether a foreign debtor seeking recognition of its foreign proceeding under chapter 15 of the Bankruptcy Code must satisfy these requirements.&nb

Filed under:
USA, New York, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, United States bankruptcy court, US District Court for SDNY
Location:
USA
Firm:
Weil Gotshal & Manges LLP
Nondebtor alter egos don’t automatically benefit from the automatic stay, says New York’s Eastern District

“[T]he automatic stay is automatic as applied to a debtor because that is what the statute says.
As to non-debtors, it is relief that is available, but it is not automatic.”
– Judge Brian M. Cogan (E.D.N.Y.), August 20, 2015

Filed under:
USA, New York, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Debtor
Location:
USA
Firm:
Weil Gotshal & Manges LLP
“Conduct” test now the rule in the Seventh Circuit – but we still don’t know how the Seventh Circuit will deal with due process concerns

It’s hard to believe, but until now, the Seventh Circuit has never weighed in on the issue of when a claim arises in a bankruptcy case.  As a result, the Seventh Circuit has had the luxury of sitting back, watching the Third Circuit go from Frenville to 

Filed under:
USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Seventh Circuit
Location:
USA
Firm:
Weil Gotshal & Manges LLP
Why won’t the courts apply the plain language of section 1141(C)? Second Circuit misses the chance to get it right in Northern New England Telephone Operations

Key Takeaway:  Second Circuit allows secured
creditors to opt out of chapter 11 and preserve their liens from discharge.

Filed under:
USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Second Circuit
Location:
USA
Firm:
Weil Gotshal & Manges LLP
A word from the Ninth Circuit: substantial consummation is not the final word!

Interested chapter 11 plan investors, beware. A recent decision by the United States Court of Appeals for the Ninth Circuit held that even after the chapter 11 plan has been confirmed and substantially consummated and your money has been invested, an appeal can go forward even if a victory for the appellants would change the chapter 11 plan terms on which you relied and substantially diminish the value of your investment.

Filed under:
USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Debtor, Ninth Circuit, United States bankruptcy court
Location:
USA
Firm:
Weil Gotshal & Manges LLP
Avoiding Foreign Transfers Based on Foreign Law Claims: Fairfield Sentry Cases Illustrate Broad Scope of Safe Harbor in Chapter 15

A series of related decisions issued by the United States Bankruptcy Court for the Southern District of New York in the ongoing Fairfield Sentry U.S. redeemer litigation — Fairfield Sentry II,1Fairfield Sentry III,2 and Fairfield Sentry IV3 — provide insight into, among other things, the interplay between the safe harbor provision of section 546(e)4 of the Bankruptcy Code (the “Safe Harbor”) and chapter 15.

Filed under:
USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP
Authors:
Andriana Georgallas
Location:
USA
Firm:
Weil Gotshal & Manges LLP
Attention Buyers of Assets in Bankruptcy: How To Be A Good Faith Purchaser and Ensure Any Post-Closing Challenges Will Be Dismissed as Statutorily Moot Under Section 363(m) of the Bankruptcy Code

Introduction

Filed under:
USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP
Authors:
Ronit J. Berkovich
Location:
USA
Firm:
Weil Gotshal & Manges LLP