To the extent authorized by a State, Chapter 9 of the Bankruptcy Code allows municipalities (defined as a “political subdivision or public agency or instrumentality”) of that State – including public hospitals – to reorganize their debts in the face of insolvency. Municipalities achieve this goal through implementation of a court-approved plan of adjustment. Although the standards for confirming (approving) a Chapter 9 plan resemble the well-established standards for confirming a Chapter 11 plan, differences exist.

On November 5, 2015, the United States Bankruptcy Court for the Northern District of California issued a “Memorandum re Plan Confirmation” in In re Bowie, Case No. 15-10144 (Bankr. N.D. Cal. Nov.

An overvalued property may now have a bigger impact on a secured creditor’s bottom-line during bankruptcy.  Splitting with the Seventh Circuit, the Fifth Circuit in Southwest Securities, FSB v.

The court overseeing the liquidation of Reliance Insurance Company, one of the largest insurance liquidations in history, has approved the liquidator’s request for a final claims bar date of March 31, 2016.  Reliance’s current payment percentage is 65%, so any insured with a significant coverage claim against Reliance should ensure that it files a proof of claim and provides the requisite supporting information by the bar date.  If your company needs assistance in determining whether you have a valid claim against Reliance or in filing and documenting a claim, our firm can help.

A Chapter 11 debtor’s impairment in its reorganization plan of two unsecured claims filed by its former lawyer and accountant “was transparently an artifice to circumvent the purposes of” the Bankruptcy Code (“Code”), held the U.S. Court of Appeals for the Sixth Circuit on Jan. 27, 2016. In re Village Green I G.P., 2016 WL 325163, at *2 (6th Cir. Jan. 27, 2016).

Employers scored a big victory in In re Trump Entertainment Resorts, a case of first impression in the Third Circuit, which held that a debtor-employer can terminate their obligations under an expired Collective Bargaining Agreement (CBA) and implement the terms of a final offer.

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Lending credence to the old adage “if it’s too good to be true, then it probably is,” the Seventh Circuit Court of Appeals recently held that a secured lender was on inquiry notice of possible fraud by its borrower in impermissibly pledging customers’ assets to secure loans. And the penalty was steep—the Court determined the pledge to be a fraudulent transfer to the lender and the lender’s failure to act upon inquiry notice destroyed the lender’s good faith defense. As a result, the lender’s $300 million secured claim was reduced to a near-worthless general unsecured claim. 

The District Court of Appeal of Florida, Second District ("Second DCA"), recently held that a notice of assignment of a mortgage loan pursuant to the Florida Consumer Collection Practices Act ("FCCPA"), § 559.715, Florida Statutes, is not a condition precedent to filing a mortgage foreclosure action, but certified the question to the Florida Supreme Court for resolution as one of great public importance. 

In 2015, the energy sector accounted for more than one-half of all public company bankruptcy filings, including eight of the 10 largest filings. Current oil prices and bond values indicate that 2016 will be another active year. As of late January 2016, crude oil prices hovered around $30 per barrel. These low prices are reflected in the bond market, where in December 2015, approximately $80 billion in non-defaulted oil and gas debt was trading below 50 cents on the dollar.

In this day and age, there’s not much appetite for the artificial (whether it be artificial sweetener or feigned affection).  We want our food, relationships, and clothing to be authentic and legitimate.  Unfortunately, as demonstrated by a recent decision from the Sixth Circuit Court of Appeals, artificiality still manages to creep into certain chapter 11 plans and courtrooms in the form of “artificial impairment.”  Artificial impairment refers to a scenario whereby a debtor, which may otherwise be capable of satisfying a class of claims in full, proposes to impair the claim