The United States Court of Appeals for the Third Circuit issued an opinion on December 24, 2019, In re Homebanc Mortgage Crop., No. 18-2887, 2019 WL 7161215(3rd Cir. De. 24, 2019) that has significant consequences for participants in repurchases transactions. The court affirmed the lower court judgment, that the securities had been liquidated in good faith.

Facts

Section 546(e) of the Bankruptcy Code is a safe harbor provision that establishes that a trustee or debtor-in-possession may not avoid a transfer “by or to... a financial institution.. in connection with a securities contract” other than under an intentional fraudulent conveyance theory. On December 19, 2019, the Second Circuit in Note Holders v.

In In re Woodbridge Grp. of Companies, LLC, No. BR 17-12560-BLS, 2019 WL 4305444 (D. Del. Sept. 11, 2019), the United States District Court for the District of Delaware affirmed an opinion by Bankruptcy Judge Kevin Carey, and held that a proof of claim will be expunged if the note and loan agreement underlying the claim prohibit assignment and provide that assignment without consent will be “null and void.”

Facts

The Bankruptcy Protector

A Texas bankruptcy judge has determined that a landlord will not be entitled to an administrative claim for post-petition rent as it failed to file and prosecute a timely motion for allowance of the administrative rent claim holding that a previously and timely filed proof of claim is insufficient. In re: Taco Bueno Restaurants Inc., --- B.R --- (Docket No. 18-33678), 2019 WL 4010681 (Bankr. N.D. Tex. Aug. 23, 2019).

The Filing and Lease Rejection

Privacy issues implicate several Bankruptcy Code sections and Bankruptcy Rules. The debtor must also comply with non-bankruptcy rules concerning privacy to the extent that such rules are not inconsistent with the Bankruptcy Code. 28 U.S.C. § 959(b).

This article first appeared in Law360.

In bankruptcy, one of the “powers” granted to a trustee is the ability to undo previously completed transactions in order to facilitate payments to creditors. However, the Bankruptcy Code prevents a trustee from unwinding certain types of transactions. The safe harbor provision of 11 U.S.C. § 546(e) protects financial institutions performing securities transactions from having to disgorge payments initially made by a now bankrupt company.

On March 22, 2010, a three judge panel of the United States Court of Appeals for the Third Circuit issued a highly anticipated decision in the matter of In re Philadelphia Newspapers LLC, 2010 WL 1006647, (3rd Cir. Case No.

You are probably aware of the useful restructuring and creditor protection process available to insolvent entities in the United States under Chapter 11 of the United States Bankruptcy Code. In Canada, more than one insolvency regime is available in respect of debtor companies in financial difficulty and those interested in acquiring such companies or their assets. However, because of its flexibility, the most commonly used Canadian regime for larger debtor companies or complicated restructurings is the Companies’ Creditors Arrangement Act (Canada) (the "CCAA").

Amendments to the Bankruptcy and Insolvency Act (BIA) and the Companies’ Creditors Arrangement Act (CCAA) have recently come into force that purportedly protect licensees of intellectual property (IP) if their licensors become insolvent or bankrupt. There are, however, a number of uncertainties surrounding the scope of protection afforded by these amendments. Until these uncertainties are resolved, licensees may wish to consider augmenting their statutory rights by contractual and other legal mechanisms. A Bankruptcy Remote Entity (BRE) is one potential mechanism.