General Motors and Affiliates File for Chapter 11 Bankruptcy Protection
On May 14, 2009, Judge Allan Gropper of the US Bankruptcy Court, Southern District of New York, approved a US$400 million DIP financing package in the US$27 billion General Growth Properties, Inc. (“GGP”) Chapter 11 case. Judge Gropper’s ruling also included approval of GGP’s proposal to use cash flow generated by shopping centers, structured by GGP as bankruptcy remote, special purpose entities, to fund GGP’s ongoing central operations while in bankruptcy.
As widely expected, GM and all of its domestic subsidiaries filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York on June 1, 2009. Besides General Motors Corporation, the other three associated debtors are: Chevrolet-Saturn of Harlem, Inc., Saturn, LLC and Saturn Distribution Corporation. Please note that GMAC is not included in these bankruptcy filings.
On May 26, Lehman Brothers Holdings Inc. (LBHI) filed a motion requesting the U.S. Bankruptcy Court for the Southern District of New York to establish August 24 as the deadline for filing proofs of claim against LBHI and its affiliates, and to establish a procedure for such filing, including a required form to be completed online relating to derivatives claims, and a new proof of claim form specific to this case.
Pending motions in the Bankruptcy Court for the Southern District of New York in General Growth Properties’ (GGP) bankruptcy case (Case No. 09-11977) are expected to shed new light on how courts may treat real estate special-purpose entities in bankruptcy and may also have implications for the efficacy of bankruptcy-remote SPE structures used in asset-backed securitization transactions.
The United States Bankruptcy Court for the Southern District of New York, overseeing the bankruptcy cases of Lehman Brothers Holdings Inc. and its affiliated debtors (collectively, the “Debtors”), entered an order on July 2, 2009 (the “Bar Date Order”), establishing September 22, 2009, at 5:00 p.m. (Eastern Time) as the deadline for the filing of claims against the Debtors (the “Bar Date”).
Late last night, after presiding over a three-day hearing on the matter last week, U.S. Bankruptcy Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York issued an order authorizing the sale of substantially all of the assets of General Motors Corporation (“Old GM”) under Section 363 of the Bankruptcy Code (“Section 363 Sale”).
The United States District Court for the Southern District of New York has affirmed a bankruptcy court's ruling that defense costs advanced by an insurer to a debtor under an Interim Fee Advancement and Non-Waiver Agreement (the Interim Agreement) were not held in trust and, therefore, constituted property of the debtor's estate. Great Am. Ins. Co. v. Bally Total Fitness Holding Corp. (In re Bally Total Fitness of Greater N.Y.), No. 09-CV-4052, 2009 WL 1684022 (S.D.N.Y. June 15, 2009).
The United States District Court for the Eastern District of New York, applying New York law, has held that an insured did not violate an insurance policy's cooperation clause when it agreed, without providing advance notice to the insurer, to lift the automatic bankruptcy stay with respect to certain personal injury actions filed against it. Admiral Ins. Co. v. Grace Indus., Inc., 2009 WL 2222369 (E.D.N.Y. July 23, 2009).