Landlords successful in obtaining stub rent as an administrative expense under Section 503

In re Goody’s Family Clothing, Inc- F3d – 2010 WL 2671929 (3d Cir June 29, 2010)

CASE SNAPSHOT

Filed under:
USA, Insolvency & Restructuring, Litigation, Real Estate, Reed Smith LLP, Bankruptcy, Debtor, Landlord, Legal burden of proof, Exclusive right, Title 11 of the US Code, Third Circuit
Authors:
Derek J. Baker
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

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

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

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

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
Delaware Bankruptcy Court sheds light on the common interest doctrine preventing the waiver of privileged communications

The United States Bankruptcy Court for the District of Delaware (the "Delaware Bankruptcy Court"), recently in In re Leslie Controls, Inc., Bankr. D. Del., Case No. 10-12199, expounded on whether attorney-client and attorney work-product privileged documents remained protected from discovery under the common interest doctrine. The common interest doctrine permits counsel representing different clients with similar legal interests to share information without having to disclose that information to others.

Filed under:
USA, Delaware, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Waiver, Interest, Work-product doctrine, Attorney-client privilege, Discovery, United States bankruptcy court, US District Court for District of Delaware
Authors:
Brian M. Rostocki
Location:
USA
Firm:
Reed Smith LLP
Funds ‘earmarked’ for bondholders not property of the estate and not subject to avoidance

Cooper v Centar Investments LTD, et al. (In re Trigem America Corporation), 431 B.R. 855 (C.D. Cal. 2010)

CASE SNAPSHOT

Filed under:
USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bond (finance), Debtor, Fraud, Accounts receivable, Interest, Swap (finance), Stock exchange, Convertible bonds, Ninth Circuit
Authors:
Christopher O. Rivas
Location:
USA
Firm:
Reed Smith LLP
Creditors of insolvent subsidiaries may bring derivative actions against parent company’s officers and directors for breach of fiduciary duties

Official Committee of Unsecured Creditors of TOUSA, Inc. v. Technical Olympic, S.A. (In re TOUSA, Inc.), 2010 WL 3835829 (Bankr. S.D. Fla. 2010)

CASE SNAPSHOT

Filed under:
USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Shareholder, Unsecured debt, Security (finance), Breach of contract, Fiduciary, Board of directors, Debt, Standing (law), Involuntary dismissal, Stakeholder (corporate), Business judgement rule, Subsidiary, Parent company, United States bankruptcy court
Authors:
Brian M. Schenker
Location:
USA
Firm:
Reed Smith LLP
Bankruptcy court (mostly) dismisses complaint against pre-petition lenders based on alleged inequitable conduct

Official Committee of Unsecured Creditors v Credit Suisse (In re Champion Enterprises, Inc.), 2010 WL 3522132 (Bankr. D. Del. 2010)

CASE SNAPSHOT

Filed under:
USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Contractual term, Bankruptcy, Credit (finance), Unsecured debt, Breach of contract, Debt, Estoppel, Unjust enrichment, Default (finance), Line of credit, Credit Suisse, Title 11 of the US Code, United States bankruptcy court
Authors:
Aaron B. Chapin
Location:
USA
Firm:
Reed Smith LLP
Swaps

We are seeing more and more challenges by borrowers to swaps. No big surprise since, with falling interest rates over the past few years, the borrowers are on the wrong end of the transactions. Although swaps are considered independent of the loans, they are often secured by the same collateral and are usually crossdefaulted with the loans, so the obligations that arise from early termination (which can be significant) become part of the collection process and are being fought vigorously by borrowers.

Filed under:
USA, Banking, Derivatives, Insolvency & Restructuring, Litigation, Reed Smith LLP, Debtor, Collateral (finance), Limited liability company, Swap (finance), Mortgage loan, Foreclosure, Secured loan
Authors:
Peter S. Clark, II
Location:
USA
Firm:
Reed Smith LLP