Secured transactions typically include two key documents, which are often executed simultaneously: a promissory note memorializing loan and repayment terms executed by the borrower in favor of the lender and a security agreement granting the lender an interest in collateral securing the borrower’s debt owed to the bank. If a borrower ends up filing for bankruptcy, the bank likely will seek to enforce the security agreement against the borrower and recover the collateral. However, as made clear by the U.S.
The bankruptcy trustee of a property management company sought to recover money paid to a power company prior to bankruptcy as an avoidable preference. The Fifth Circuit agreed with both the bankruptcy court and the district court that the payments were settlement payments under a forward contract exempt from avoidance.
In a recent decision arising out of the Chapter 11 bankruptcy case of Global Industrial Technologies, Inc. (GIT),1 the U.S. Court of Appeals for the Third Circuit, sitting en banc, held that insurance companies that had issued liability insurance policies to a manufacturer before its bankruptcy filing had standing to object to confirmation of the company’s Chapter 11 plan of reorganization, even though the plan had been designed to be “insurance neutral” with regard to the policies.
The Uniform Commercial Code was established to provide predictability and conformity in commercial transactions. Certain states have adopted nonstandard UCC provisions, which create an unreliable and unpredictable market for secured creditors. In addition, statutory liens, which are liens arising under federal and state statute, may disrupt the priority of secured creditors’ interest in a debtor’s assets. In re First River Energy, L.L.C. (986 F.3d 914, 917 (5th Cir.
Pursuant to the Federal Credit Union Act, the National Credit Union Administration issued a temporary final rule on April 21, easing regulatory requirements to assist federal credit unions (“FCUs”) and federally insured credit unions (“FICUs”) during the coronavirus (“COVID-19”) pandemic. The rule makes the following key changes that will be effective through December 31, 2020:
On December 12, 2019, the United States Court of Appeals for the Sixth Circuit (“Sixth Circuit”) issued an opinion affirming in part and reversing in part a bankruptcy court’s assertion of exclusive and unlimited jurisdiction over certain of FirstEnergy Solutions’ (“FES”) power purchase agreements that FERC had previously approved under the Federal Power Act (“FPA”) and that FES sought to reject in bankruptcy.