On August 30, 2021, BL Santa Fe, LLC, along with one affiliated debtor doing business as Bishops Lodge, an Auberge Resorts Collection luxury hotel and resort located in Santa Fe, New Mexico, filed a petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware (Case No. 21-11190). The company reports $50 to $100 million in both assets and liabilities.
An appeal against a decision to summarily dismiss the appellant’s application to have consent orders set aside has been allowed, after the Full Court found that the appellant was no longer a person affected by the consent orders.
In a recent judgment, which provides useful clarification to liquidators of companies, the High Court has held that section 631 of the Companies Act 2014 (the “Act”) does not confer a free-standing jurisdiction to order disclosure of information or documentation. Furthermore, the Court held that the inspection right conferred by section 684 of the Act cannot be used as a vehicle for carrying out a “fishing expedition” of a wide range of documents.
Background
Earlier this month – citing the “virtually unflagging obligation” of an Article III appellate court to exercise its subject matter jurisdiction – the Eighth Circuit Court of Appeals decried the pervasive overreliance by district courts on the doctrine “equitable mootness” to duck appeals of confirmation orders.[1]
The Situation: In Homaidan v. Sallie Mae, Inc., et al., the U.S. Court of Appeals for the Second Circuit recently affirmed that certain types of private student loans are not "obligation[s] to repay funds received as an educational benefit, scholarship, or stipend" that are exempt from discharge in bankruptcy absent an undue hardship.
Chapter 11 plans of reorganization provide creditors with recoveries (cash or new securities) in exchange for a release and discharge of all claims against the debtor. Many Chapter 11 plans go a step further to release claims against related entities and persons who are not debtors in the case. Members of Congress have recently proposed legislation that could prohibit such nonconsensual third-party releases.
SEPTEMBER 2021 THE PRACTICAL REAL ESTATE LAWYER | 49 JOSHUA STEIN, one of the most prolific contributors to The Practical Real Estate Lawyer in its history, handles a wide range of commercial real estate transactions and regularly serves as an expert witness. He is a member of the American College of Real estate Lawyers and author of five books and over 300 articles on commercial real estate law and practice. Many appear on his website, www.joshuastein.com.
The recent case of Re A Company [2021] EWHC 2289 (Ch) outlines how the coronavirus test for winding up petitions will be applied by the Courts.
Priming transactions have grown in frequency during the pandemic, and with them, new ways to test the limits of credit agreement provisions. In a recent example, lenders to struggling restaurant-supplier TriMark entered into a transaction whereby they provided new money to TriMark, primed non-participating existing lenders, and then amended the existing credit agreement to broaden the contract’s “no-action clause” to make it difficult for non-participating lenders to bring suit under the credit agreement. It didn’t work.
Section 440A(2) of the Corporations Act 2001 (Cth) (the Act) requires the Court to adjourn a winding up application if it is satisfied that it would be in the best interest of creditors for the company to continue under administration rather than be wound up.