A federal bankruptcy imposed sanctions against two mortgage companies and their attorneys for making misrepresentations as to which party was the true holder of the mortgage and note. Decisions such as the one in In re Nosek resonate with particular significance as the mortgage crisis continues to have widespread ramifications.  

The United States Court of Appeals for the Third Circuit has issued a decision that provides an important summary concerning the circumstances under which state law causes of action asserted between nondebtor parties are sufficiently interconnected with claims brought against a debtor to be considered “core proceedings,” which may be determined as part of a bankruptcy case. In re Exide Technologies, 544 F.3d 196 (3d. Cir. 2008).  

Introduction

In In re Entringer Bakeries, Inc.,1 the United States Court of Appeals for the Fifth Circuit affirmed the viability of the “earmarking doctrine” as a judicially-created defense to a preference action under section 547(b) of the Bankruptcy Code.

Introduction:  

As the economy worsens and the value of corporate assets declines, unsecured creditors are finding that very little, if anything, is left for them at the bankruptcy table after the secured creditors have taken as much as they can from a debtor’s assets. Now, after a period of having copious credit available on attractive terms, debtors are going into bankruptcy without sufficient assets to pay even their secured creditors in full. In such circumstances, prospects for unsecured creditors are bleak indeed.  

The Sixth Circuit recently held that section 2-702(3) of the Uniform Commercial Code (the "UCC"), which permits good faith purchasers to defeat a valid right to reclaim, does not allow a secured creditor to defeat that right.[1] The Sixth Circuit found that the security interest held by a DIP lender could not be used to defeat the right of a reclaiming creditor under the UCC or pre-BAPCPA section 546(c) of the Bankruptcy Code. This decision may impact the way bankruptcy courts consider reclamation claims under revised section 546(c) of the Bankruptcy Code.

The following is a list of some recent larger U.S. bankruptcy filings in various industries. To the extent you are a creditor to any of these debtors, or other entities which may have filed for bankruptcy protection, you as a creditor are entitled to certain protections under the Bankruptcy Code.  

AMUSEMENT PARKS

HRP Myrtle Beach Holdings converts to Chapter 7; unable to find post-petition financing.  

BANKING

Silver State Bancorp files Chapter 7 petition in Nevada.  

The U.S. Court of Appeals for the Fourth Circuit recently issued an opinion, reversing an earlier bankruptcy court ruling that had revived the question of whether a physical supply contract may qualify as a forward contract or swap agreement for purposes of the Bankruptcy Code. Previously, the bankruptcy court for the Eastern District of North Carolina ruled that what it termed a simple supply contract between a natural gas seller and an end-user, as a matter of law, does not constitute a swap agreement.

On December 10, 2008, Bernard Madoff confessed to his two sons that he had been running what amounted to a massive Ponzi scheme on the scale of approximately $50 billion and that he could no longer sustain it due to, among other things, substantial redemption requests. That night, his sons alerted authorities.