The bankruptcy courts have a long history of being willing to use their judicial power under the Bankruptcy Code to prevent perceived efforts by debtors to inappropriately shield their assets from creditors. This is true even when the debtors employ structures and devices that are complex and crafted in seeming compliance with applicable law.
Directors and officers of Delaware corporations face no liability to corporate creditors from direct claims for breach of fiduciary duty, under the Delaware Supreme Court’s recent ruling in North American Catholic Educational Programming Foundation, Inc. v. Gheewalla, (May 18, 2007) (“North American Catholic”).
There are signs of hope in the aviation marketplace, with the slow return of financing and the apparent bottoming-out of aircraft values. Buying opportunities abound-but so do risks; and no situation is more frustrating than finding yourself "infected" by someone else's bankruptcy. Even if the market has reached its nadir, there are many companies that are simply not going to survive much longer in the market as it has been redefined.
The United States District Court for the Southern District of Ohio, applying Ohio law, has held that an insurer could rescind an insurance policy based on an individual's fraudulent statements that the insured company was not facing bankruptcy. Unencumbered Assets Trust v. Great Am. Ins. Co., 2007 WL 2029063 (S.D. Ohio July 10, 2007).
Your good client Michael Bluth calls you from the Delaware bankruptcy court. Now that his family’s business, The Bluth Company, has filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code and his late nights with DIP lenders and our bankruptcy colleagues have come to a temporary pause, Michael’s ready to turn back to his typical day-to-day job running his business.
SEC and FDIC Propose Dodd-Frank Broker-Dealer Resolution Rules
The U.S. Court of Appeals for the Eleventh Circuit recently held that a court cannot extinguish a secured creditor’s state-law security interests for failure to file a proof of claim during the administration of an equity receivership over entities involved in a Ponzi scheme.
A copy of the opinion in Securities and Exchange Commission v. Wells Fargo Bank is available at: Link to Opinion.
Do officers of a public corporation have an affirmative obligation to monitor corporate affairs? Yes, according to Judge Walsh in his recently issued memorandum opinion in Miller v. McDonald (In re World Health Alternatives, Inc.).1 Although "Caremark" oversight liability had previously generally only been imposed on directors of public corporations, the Bankruptcy Court for the District of Delaware determined that officers are not immune from such liability as a matter of law.
It’s been a hard year for cryptocurrency. The values of most cryptocurrencies, including major coins such as Bitcoin and Ethereum, have continued to tumble. In fact, the price of one stablecoin, which is a form of cryptocurrency tied to another currency, commodity or financial instrument, de-pegged from its cryptocurrency token and entered into a downward spiral. Ultimately, the stablecoin and the crypto token it was pegged to collapsed, erasing $18 billion of value with it.
An accounting firm in the United States must produce workpapers to a chapter 15 foreign representative even if the law where the foreign main proceeding is pending would not permit such production. CohnReznick LLP v. Foreign Representatives of Platinum Partners Value Arbitrage Fund L.P. (In re Platinum Partners Value Arbitrage Fund L.P.), No. 18-5176 (DLC), 2018 U.S. Dist. LEXIS 109684 (S.D.N.Y June 29, 2018).