The recent drop in crude oil prices has been a boon to consumers and businesses alike. However, sustained lower crude prices will invariably have a negative impact on drilling activity in those states where oil and gas development has been concentrated. The current price is below production costs in some locations. Without a prompt recovery in prices, it can be expected that a sustained decrease in oil and gas activity will have an adverse financial impact on the myriad of businesses that provide supplies and services in the oil and gas sector.
As many areas continue to rebound slightly from the real-estate downturn, much litigation still exists related to the exposure of guarantors for corporate-entity real estate loans. In many instances a corporation or Limited Liability Company (LLC) may have filed for Chapter 11 in an effort to stave off a foreclosure and restructure the secured debt. However, it is well settled that a corporate bankruptcy case does not operate to discharge a guaranty from a guarantor who is not in bankruptcy.
On April 14, in In re Free Lance-Star Publishing, 512 B.R. 798 (Bankr. E.D. Va. 2014), the U.S. Bankruptcy Court for the Eastern District of Virginia considered the objection of Chapter 11 debtors to a secured creditor's right to credit bid at a sale of the debtors' assets pursuant to 11 U.S.C. Section 363.
The Wisconsin Supreme Court issued a pair of decisions in July of 2014 that will make life for judgment creditors much more complicated. On July 15, 2014, the court issued Attorney’s Title Guaranty Fund, Inc. v. Town Bank, 2014 WI 63, ¶ 25, ___ Wis. 2d _____ and Associated Bank N.A. v. Collier, 2014 WI 62, ¶ 23-25, 38, ____Wis. 2d ______. These cases change the way judgment creditors must act to obtain a priority interest in the personal property of a debtor.
On July 15, 2014, the Wisconsin Supreme Court made it much more difficult, costly and cumbersome for a judgment creditor to obtain a priority lien against the personal property of a judgment debtor. Associated Bank, N.A., v. Jack W. Collier, 2014 WI 62. Two members of the court disagreed with the decision and argued that it has changed 150 years of Wisconsin law.
In re Joan Fabrics Corp., 508 B.R. 881 (Bankr. D. Del. 2014) –
The buyer of assets in a bankruptcy sale sought to enforce its asset purchase agreement against a county that was seeking to collect personal property taxes arising prior to the sale by exercising a statutory lien on the property acquired by the buyer.
Although Section 506(b) of the Bankruptcy Code explicitly allows payment of post-petition interest to holders of oversecured claims (i.e., where the value of the collateral exceeds the amount of the claim), the Bankruptcy Code does not describe how to calculate it. No bright line rules exist dictating how to determine oversecured status, the timing of the valuation, and the rate and type of interest to be paid to oversecured creditors. Computation of post-petition interest is a frequent topic of debate among the courts.
Readers may remember the dramatic restructuring of the GM and Chrysler dealer networks as part of the bankruptcy proceedings for each auto maker in 2009. The state auto dealer franchise statutes and their protection against dealer terminations were summarily preempted by the bankruptcy proceedings and the pre-condition of dealer network reduction for the necessary loans from the federal government to the debtors in possession. Dealers challenged this action in the Court of Claims, and by an April 7, 2014 decision in A&D Auto Sales, Inc. et al. v.
ARTICLE 9 AND THE LIFE OF A UCC FINANCING STATEMENT