Global Insolvency | Daily News Headlines on Insolvency Developments across the Globe

2010-05-07

Credit bidding has become a really hot issue recently. For those of us who don't normally work on bankruptcy matters, the right to credit bid is an important right that secured lenders usually have in a bankruptcy proceeding. If you're the senior secured lender and you want to buy the company's assets in a bankruptcy sale, you can show up at the auction and, instead of bidding cash, you can place credit bids.

Filed under:

USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Credit (finance), Debtor, Collateral (finance), Secured loan, Uniform Commercial Code (USA), Third Circuit

Authors:

Susan C. Alker

Location:

USA

Firm:

Reed Smith LLP

US Bankruptcy Court limits ISDA counterparty rights upon a bankruptcy event of default

2010-06-25

In re Lehman Brothers Holdings, Inc., Case No. 08-13555 et seq. (JMP)(jointly administered)

In this US decision, the Bankruptcy Court held that the "safe harbour" protections of the US Bankruptcy Code only protect a non-defaulting party's right to liquidate, terminate or accelerate a swap, to offset and to net termination values and payment amounts and to foreclose on collateral, but do not permit the withholding of performance under a swap if the swap is not terminated.

Authors:

Siân C. Fellows , Nicholas Horsfield

Location:

USA

Firm:

Reed Smith LLP

The Third Circuit overrules a long-standing case, changing the ability of personal injury plaintiffs to bring suit against debtors

2010-09-13

JELD-WEN, Inc v Van Brunt (In re Grossman’s Inc), (3d Cir No 09-1563, June 2, 2010)

CASE SNAPSHOT

Filed under:

USA, Insolvency & Restructuring, Litigation, Product Regulation & Liability, Reed Smith LLP, Bankruptcy, Debtor, Statutory interpretation, Due process, Liquidation, Precondition, Bankruptcy discharge, Title 11 of the US Code, United States bankruptcy court, Third Circuit

Authors:

Jennifer P. Knox

Location:

USA

Firm:

Reed Smith LLP

Delaware Bankruptcy Court finds appointment of examiner not required every time the statutory debt threshold is exceeded

2010-09-13

In re Spansion, Inc, 426 BR 114 (Bankr Del April 1, 2010)

CASE SNAPSHOT

Filed under:

USA, Delaware, Insolvency & Restructuring, Litigation, Reed Smith LLP, Debtor, Unsecured debt, Fraud, Interest, Misconduct, Discovery, Debt, Vacated judgment, Misrepresentation, Title 11 of the US Code, United States bankruptcy court

Authors:

Elizabeth A. McGovern

Location:

USA

Firm:

Reed Smith LLP

The Third Circuit expands the substantial-performance test to determine if a trademark license contract is executory

2010-09-13

In re Exide Technologies, 607 F3d 957 (3rd Cir June 1, 2010)

CASE SNAPSHOT

Filed under:

USA, Insolvency & Restructuring, Litigation, Trademarks, Reed Smith LLP, Bankruptcy, Debtor, Breach of contract, Employment contract, Second Circuit, United States bankruptcy court, Third Circuit

Authors:

Christopher O. Rivas

Location:

USA

Firm:

Reed Smith LLP

Defense of imputation of an agent’s bad conduct to its principal clarified in Pennsylvania; independent auditor at risk for $1 billion in damages

2010-09-13

Official Committee of Unsecured Creditors of Allegheny Health, Education and Research Foundation v PricewaterhouseCoopers, LLP(3d Cir No 07-1397, May 28, 2010)

CASE SNAPSHOT

Filed under:

USA, Pennsylvania, Insolvency & Restructuring, Litigation, Non-profit Organizations, Professional Negligence, Reed Smith LLP, Breach of contract, Fraud, Fiduciary, Audit, Negligence, Remand (court procedure), Collusion, Chief financial officer, Pennsylvania Supreme Court

Authors:

Ann E. Pille

Location:

USA

Firm:

Reed Smith LLP

Sellers beware - unauthorized payments from ‘cash collateral’ will be avoided

2010-09-13

Suppliers to chapter 11 debtors-in-possession should always ensure that they are not being paid from the debtor’s “cash collateral” without court approval. Marathon Petroleum Company supplied products to debtor Delco Oil in the ordinary course of its business during the bankruptcy case, but was forced to return all of the postpetition payments it received from Delco, pursuant to section 549 of the Bankruptcy Code. Marathon was required to return these payments because they were deemed part of the cash collateral that was secured by Delco’s pre-petition creditor, CapitalSource Finance.

Filed under:

USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Collateral (finance), Secured loan, Title 11 of the US Code, Uniform Commercial Code (USA), Trustee, United States bankruptcy court

Authors:

Christopher O. Rivas

Location:

USA

Firm:

Reed Smith LLP

An LLC member/manager is an ‘insider,’ so that payments are preferential transfers subject to avoidance up to one year prior to bankruptcy filing

2010-09-13

Longview Aluminum, LLC v Brandt (In re Longview Aluminum, LLC), 2010 WL 2635787 (ND Ill, June 28, 2010)

CASE SNAPSHOT

Filed under:

USA, Illinois, Company & Commercial, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Board of directors, Limited liability company, Consent, Title 11 of the US Code, Trustee, United States bankruptcy court, Seventh Circuit

Authors:

Location:

Firm:

2010-09-13

In this edition of the Landlord’s Corner, we review various cases that address the (i) rights of landlords to recover their property post-rejection, (ii) whether payments pursuant to a termination of lease agreement constitute preferential transfers and (iii) whether a lease could be retroactively rejected in the absence of a formal motion to reject.

Filed under: