On January 3, the U.S. Court of Appeals for the Tenth Circuit issued a ruling reversing the district court’s decision that Asarco could not proceed with its claims for cost recovery at a Utah Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) mining site. The case is Asarco, LLC v. Noranda Mining, Inc.

Asarco declared bankruptcy in August 2005, and, as the Court of Appeals notes

An undersecured mortgagee’s “release of [its entire underlying claim] was value obtained ‘in exchange for’ the [pre-bankruptcy] sale of the [debtor’s] property,” held the U.S. Court of Appeals for the Tenth Circuit on Dec. 6, 2016. In re Expert South Tulsa LLC, 2016 U.S. App. LEXIS 21704, at *11 (10th Cir. Dec. 6, 2016). The Tenth Circuit flatly rejected the debtor’s attempt “to set aside as a fraudulent transfer its own sale of real estate that was encumbered by a mortgage far exceeding the sale price.” Id. at *1.

As the Supreme Court recently reminded us in Bullard v. Blue Hills Bank, not all orders in bankruptcy cases are immediately appealable as a matter of right. Only those orders deemed sufficiently “final” may be appealed without leave under 28 U.S.C. § 158(a).

Section 546(e) of the bankruptcy code prohibits a bankruptcy trustee from avoiding “settlement payment[s]”, or payments “made in connection with a securities contract,” that are “made by or to (or for the benefit of)” qualifying financial entities, including financial institutions, stockbrokers, commodities brokers and others.

When Can a Subsidiary Be Liable for the Actions of Its Owners?

Chapter 7 Trustees can and sometimes do successfully avoid creditor’s perfected liens. Typically, the avoidance opportunity arises because the lien was not perfected on a timely basis. The Bankruptcy Code provides that the avoided liens may be “preserved” for the benefit of the bankruptcy estate; this prevents a windfall to a junior lienor who would become the first lienholder courtesy of the Trustee’s success.

Sovereign Bank v Hepner (In re Roser), 613 F.3d 1240 (10th Cir. 2010).

CASE SNAPSHOT

Parks v. Dittmar (In re Dittmar), 618 F.3d 1199 (10th Cir. 2010)

CASE SNAPSHOT

Courts generally agree that pre-petition agreements to forgo the protec-tions of bankruptcy are invalid as against public policy. A recent Tenth Cir-cuit Bankruptcy Appellate Panel decision calls this accepted premise into question by holding that provisions contained in a limited liability company agreement that expressly barred the company, and restricted the manager, from filing a bankruptcy petition were enforceable. DB Capital Holdings, LLC v. Aspen HH Ventures, LLC (In re DB Capital Holdings, LLC), No. 10-046, 2010 Bankr. LEXIS 4176 (B.A.P. 10th Cir., Dec.

In nearly every bankruptcy proceeding there is some constituency that ends up having its claim or interest impaired. Not surprisingly, therefore, these same constituencies would like to avoid that outcome by restricting the debtor’s ability to commence bankruptcy in the first place.