Background: Grupo OAS, a Brazilian construction conglomerate linked to a massive corruption scandal (“OAS”), filed for Chapter 15 creditor protection in the Bankruptcy Court for the Southern District of New York on April 15, 2015, two weeks after entering bankruptcy in Brazil. If “recognized” by Bankruptcy Judge Stuart Bernstein, the Chapter 15 petition would, among other things, essentially bind OAS creditors in the United States to the restructuring terms approved by the Brazilian court overseeing OAS’s reorganization.

In In re: China Medical Technologies, Inc., 522 B.R. 28 (Bankr. S.D. N.Y.

The following commentary provides empirical evidence of how pronounced an impact the consolidation of asbestos cases has had upon the verdicts in the New York City Asbestos Litigation (‘‘NYCAL’’).1 The proliferation of case consolidations as the judicial response to burgeoning caseloads in NYCAL, with an emphasis on expediency and case management, has led to inequitable outcomes, which in turn have raised concerns over violations of defendant due process.

Why Lawyers Need to Pay More Attention to the Distinctions Between Veil-Piercing and Alter-Ego Theories

Chief Judge Cecelia G. Morris of the Bankruptcy Court for the Southern District of New York decided that banks may not place an administrative freeze, even a temporary one, on the bank account of an individual who files for bankruptcy.

The New York State Attorney General settled a lawsuit against Ernst & Young related to its involvement in the financial statement preparation of Lehman Brothers Holding, Inc. The NY AG had alleged that the auditing firm had countenanced Lehman’s inclusion of certain repurchase transactions as sales and not as financings, which permitted the firm to remove “tens of billions of dollars” of securities from its balance sheet. According to the NY AG, the repo transactions—known as “Repo 105”—“served no legitimate purpose.

Is a rent-stabilized lease in New York a “local public assistance benefit” that is exempt from property of a debtor’s bankruptcy estate, or is it merely “a quirk of the regulatory scheme in the New York housing market[?]”  That was the question recently decided by the Second Circuit in In re Monteverde.  

Judge Robert Gerber ruled last week that General Motors LLC (“New GM”), the entity formed in 2009 to acquire the assets of General Motors Corporation (“Old GM”), is shielded from a substantial portion of the lawsuits based on ignition switch defects in cars manufactured prior to New GM’s acquisition of the assets of Old GM in 2009.

As we previewed last week, the U.S. Bankruptcy Court for the Southern District of New York recently handed General Motors (“New GM”) an enormous victory that may end up shielding the company from up to $10 billion in successor liability claims.

Two recent decisions of the US District Court for the Southern District of New York may complicate future debt exchange offers. The cases address the validity, under the Trust Indenture Act of 1939, as amended (the Act), of indenture amendments that delete substantive covenant protections in the context of out-of-court debt restructurings. Such amendments are a common feature of debt exchange and cash tender offers and are often essential to achieve a restructuring outside of bankruptcy court.