Applying Texas law, the United States Bankruptcy Court for the Northern District of Texas has held that a primary insurer that "exhausted" its policy limits by agreeing to pay the insured's bankruptcy estate its remaining policy limits, while stipulating that a significant portion of this payment would be returned to the insurer by the estate's bankruptcy trustee, was required to reimburse the excess insurer the value of the returned payments made by the trustee. Yaquinto v. Admiral Ins. Co., Inc. (In re Cool Partners, Inc.), 2010 WL 1779668 (Bankr. N.D. Tex. Apr. 30, 2010).
The Texas Rangers filed for bankruptcy relief in late May, 2010, to break an impasse between the club and its bank lenders, who are owed approximately $550 million and who oppose a planned sale to a group led by Nolan Ryan. The Rangers are owned by Hicks Sports Group, which acquired the club in 1998 and had guaranteed the debt.
What is an inherited IRA? It is the IRA a non-spouse beneficiary receives upon the death of the IRA holder. Unlike a spousal beneficiary, the non-spouse beneficiary must maintain an inherited IRA in the name of the decedent for the benefit of the beneficiary. What is at stake? When the beneficiary files for bankruptcy protection, are the assets of the inherited IRA part of the bankruptcy estate and available to pay claims of creditors? Or is the inherited IRA exempt from the bankruptcy estate and free from creditor claims? Recent court cases have differing answers.
As widely reported, the bankruptcy auction for the Texas Rangers Major League Baseball franchise ended with a winning $593 million bid from an ownership group led by Nolan Ryan.
Good v RMR Investments, Inc, 428 BR 249 (ED Texas, March 31, 2010)
CASE SNAPSHOT
A secured creditor in a chapter 11 case objected to the confirmation of the reorganization plan of the debtor, arguing that the proper “cramdown” interest rate (court-modified rate) was the pre-petition contractual default rate, rather than the significantly lower cramdown rate. After the debtor appealed, the District Court affirmed, holding that utilizing the contract rate of interest was appropriate because the debtor was solvent.
The Texas Rangers were sold in an August bankruptcy auction to a syndicate headed by former baseball great Nolan Ryan and attorney Chuck Greenberg. The final purchase price was $608 million—nearly $100 million more than the original offer for the team—and is a great example of how lenders can use the bankruptcy process to maximize the value of an asset.
When defaults spiked for loans underwritten by commercial mortgage-backed securities (CMBS), many Texas attorneys sought state court-appointed receivers for commercial real estate assets.
Placing a struggling property in receivership has long been a remedy available for lenders, but Texas' relatively expedited and inexpensive nonjudicial foreclosure process limited the remedy's practical value for traditional lenders.
In order to identify the appropriate cramdown rate of interest which allows a secured creditor to receive the “present value” of its claim through a stream of payments proposed in a plan, such analysis must necessarily begin with the Supreme Court’s plurality opinion in Till v. SCS Credit Corp., 541 U.S. 465 (2004).
Basic Capital Management, Inc. v. Dynex Commercial, Inc., 2011 WL 12067376 (Tex. Sup. Ct. J. Apr. 1, 2011)
CASE SNAPSHOT
Jackie Ford, partner in the Vorys Houston and Columbus offices, authored an article for Law360 onwhether traditional definitions of property and ownership include social media accounts. The full text of the article is included below.
WHO OWNS LIKES, POSTS, PAGES AND TWEETS IN BANKRUPTCY?