FDIC treatment of creditor claims under orderly liquidation process

When a traditional nonbanking company files a case under the Bankruptcy Code, a judge is appointed to be the neutral arbiter of disputes that arise between the debtor and its creditors.

Filed under:
USA, Banking, Insolvency & Restructuring, Litigation, Reed Smith LLP, Standard of review, Liquidation, Judicial review, Federal Deposit Insurance Corporation (USA), Financial Stability Oversight Council, Title 11 of the US Code
Authors:
Robert P. Simons , Luke A. Sizemore
Location:
USA
Firm:
Reed Smith LLP
Court upholds ipso facto clause and default interest rate

In re General Growth Props., Inc., Case No. 09-11977 (ALG), 2011 BL 189724 (Bankr. S.D.N.Y. July 20, 2011)  

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Filed under:
USA, Banking, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Interest, Default (finance)
Authors:
Jeanne S. Lofgren
Location:
USA
Firm:
Reed Smith LLP
Substantive consolidation order not automatically retroactive absent language to the contrary

Giuliano v. Shorenstein Company, LLC (In re Sunset Aviation, Inc.), Adv. No. 11- 50965, Bankr. No. 09-10778, 2011 WL 4002429 (Bankr. D. Del. Sept. 7, 2011)  

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Filed under:
USA, Delaware, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Limited liability company, Ex post facto law, United States bankruptcy court, Sixth Circuit, US District Court for District of Delaware
Authors:
Brian M. Schenker
Location:
USA
Firm:
Reed Smith LLP
In a case of first impression, court grants administrative priority status to post-petition withdrawal liability

In re Marcal Paper Mills, Inc., No. 09-4574, 650 F.3d 311 (3d Cir., 2011)

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Filed under:
USA, Employee Benefits & Pensions, Insolvency & Restructuring, Litigation, Reed Smith LLP, Employee Retirement Income Security Act 1974 (USA), Defined benefit pension plan, Third Circuit
Authors:
Kathleen A. Murphy
Location:
USA
Firm:
Reed Smith LLP
Pre-petition liens on FCC license proceeds can attach to post-petition proceeds

Sprint Nextel Corporation v. U.S. Bank N.A. (In re TerreStar Networks, Inc.), Case No. 10-15446 (Bankr. S.D.N.Y., Aug. 19, 2011)

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Filed under:
USA, Insolvency & Restructuring, Litigation, Telecoms, Reed Smith LLP, Bankruptcy, Collateral (finance), Secured creditor, Unsecured creditor, Federal Communications Commission (USA), Sprint Corporation
Authors:
Christopher O. Rivas
Location:
USA
Firm:
Reed Smith LLP
Court finds defendants knowingly waived right to jury trial, affirms such waivers must be clear

Lehman Brothers Holdings, Inc. v. Bethany Holdings Group, LLC, et al., 2011 WL 3427013, (S.D.N.Y. Aug. 5, 2011)

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Filed under:
USA, Banking, Insolvency & Restructuring, Litigation, Real Estate, Reed Smith LLP, Surety, Waiver, Jury trial, Default (finance), Lehman Brothers
Authors:
Kathleen A. Murphy
Location:
USA
Firm:
Reed Smith LLP
Strict compliance with Section 524(c) required to uphold reaffirmation contract

Sandburg Financial Corp. v. American Rice, Inc. (In the Matter of American Rice, Inc.), No. 11-40301 (5th Cir., Sept. 22, 2011)

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Filed under:
USA, Insolvency & Restructuring, Litigation, Real Estate, Reed Smith LLP, Injunction, Debt, Fifth Circuit
Authors:
Joseph D. Filloy
Location:
USA
Firm:
Reed Smith LLP
Court finds material questions of fact regarding breach of fiduciary duties and deepening insolvency

Official Committee of Unsecured Creditors v. Baldwin (In re Lemington Home for the Aged), No. 10-4456 (3d Cir., Sept. 21, 2011)

CASE SNAPSHOT

Filed under:
USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Fiduciary, Board of directors
Location:
USA
Firm:
Reed Smith LLP
SIPC trustee provides updates on prospective claims process

Although no official claims process has been announced, on November 10 and 11, the Trustee and its counsel provided additional information to securities claimants of MF Global Inc. ("MFGI") on how the process will work. Additionally, the Trustee requested patience during the ongoing liquidation as it works towards developing the claims process and effectuating a bulk transfer of securities customers accounts.

Filed under:
USA, Capital Markets, Insolvency & Restructuring, Reed Smith LLP, Security (finance), Commodity, Liquidation, US Securities and Exchange Commission, US Department of Justice, Commodity Futures Trading Commission (USA), Securities Investor Protection Corporation, Trustee, United States bankruptcy court
Authors:
Elizabeth A. McGovern
Location:
USA
Firm:
Reed Smith LLP
SIPC Trustee takes first steps to thaw frozen customer securities accounts

On November 4, 2011, the SIPC Trustee took his first steps toward transferring frozen customer securities accounts held by MF Global Inc. ("MFGI") when he announced that he will be accepting proposals for the transfer of all customer securities accounts of MFGI (the "Securities Accounts") to another member of the Securities Investor Protection Corporation. This action is in addition to the steps the Trustee took last week to transfer certain segregated commodities accounts from MFGI to other futures commission merchants.

Filed under:
USA, Capital Markets, Insolvency & Restructuring, Litigation, Reed Smith LLP, Security (finance), Discovery, Commodity, Liquidation, Due diligence, Balance sheet, Subpoena, Non-disclosure agreement, Memorandum opinion, Securities Investor Protection Corporation, Bankruptcy and Insolvency Act 1985 (Canada), Trustee, United States bankruptcy court
Authors:
Elizabeth A. McGovern
Location:
USA
Firm:
Reed Smith LLP