A decision by the Illinois Court of Appeals reinforces the importance of providing pre-disposition notice to preserve a deficiency claim against an obligor. General Motors Acceptance Corp. v. Stoval, No. 1-06-1858, ____ N.W. 2d ____ (Ill. Ct. App. June 29, 2007).
The Delaware Supreme Court has affirmed, without opinion, a ruling by a lower court that ‘deepening insolvency’ is not a cause of action under Delaware law. Trenwick America Litig. Trust v. Billett, 931 A.2d 438 (Del. 2007).
The ruling appears to be the strongest nail yet in the coffin of so-called “deepening insolvency” actions.
The U.S. Court of Appeals for the Fourth Circuit has held that a creditor may not allocate payment by a nondebtor to interest first, before applying the balance to principal—and then seek to collect the remainder of the principal from a jointly liable debtor.
That strategy violated the Bankruptcy Code’s prohibition against collecting post-petition interest, the court reasoned in National Energy & Gas Transmission, Inc. v. Liberty Electric Power, LLC, No. 06-1459 (4th Cir. July 10, 2007). The majority’s rationale drew a pointed dissent.
Can a United States bankruptcy court deny recognition of a foreign insolvency proceeding even if no one opposes such recognition? In a recent decision, Judge Burton Lifland, a highly respected bankruptcy judge and one of the authors of Chapter 15 of the Bankruptcy Code, says yes.
Liquidators of Bear Stearns Funds Seek Relief under Chapter 15
A federal court in California recently has thrown its weight behind a majority rule that holds that letter of credit proceeds should be applied to damages resulting from the rejection of a lease of non-residential real property. In re Connectix Corp., No. 05-556848, 2007 WL 2137802 (Bankr. N.D. Cal. May 10, 2007). The court also addressed the formula the parties should employ to arrive at a damages figure.
The United States Supreme Court held that reckless violations of the Fair Credit Reporting Act (“FCRA”) constitute a willful failure to comply, subjecting violators to liability for actual damages, statutory penalties and potentially punitive damages. Safeco Ins. Co. of America v. Burr, 551 U.S. _____ (June 4, 2007).
A company attempting to reorganize its affairs in bankruptcy may seek to enjoin its creditors or other third parties from suing members of the company's senior management team during the course of the reorganization proceedings, so that the senior management members can devote their time and resources to the reorganization effort without distraction. Courts throughout the country have applied differing standards in determining when the granting of an injunction of proceedings against a non-debtor is appropriate.
In a recent decision1 in a claims objection proceeding in the Solutia chapter 11 case, the Bankruptcy Court for the Southern District of New York set clear limits on the allowance of secured claims.
The United States District Court for the District of New Jersey has abstained from hearing a dispute between a primary and an excess professional liability insurer related to a bankruptcy settlement based on the mandatory abstention doctrine. Royal Indemn. Co. v. Admiral Ins. Co., Inc., 2007 WL 4171649 (D.N.J. Nov. 19, 2007). After the insured corporation declared bankruptcy, the bankruptcy trustee settled claims with the insured's primary professional liability insurer.
A purchaser of a business who fails to consider the seller's Georgia sales and use tax obligations does so at the purchaser's own peril. In the recent tax case of JD Design Group, Inc. v. Graham, the ruling by the Georgia Supreme Court makes that point all too clear.
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