In a recent holding that a creditor may collect, on an unsecured basis, post-petition attorneys’ fees under an otherwise enforceable pre-petition contract, the Second Circuit Court of Appeals followed a similar ruling by the Ninth Circuit earlier this year, adding to a conflict among the circuits on this issue.
CIT Group Inc.
Intercreditor Agreement in ION Media requires Second Lien Lenders “Be Silent” — precludes challenge to validity of liens; deprives junior creditors of standing to object to plan of reorganization.
- In re TOUSA, Inc., 408 B.R. 913 (Bankr. S.D. Fla. 2009). Prepetition lenders could not assert third-party claims against the debtors for breach of contract based on loan document representation that debtor borrowers, on a consolidated basis, would be solvent after the financing transaction because such claims did not depend on the outcome of the fraudulent transfer claims of the creditors, which asserted that individual debtor subsidiaries were insolvent.
- In re Metaldyne Corp., 409 B.R. 671 (Bankr. S.D.N.Y. 2009).
The recently passed federal appropriations bill provides a mechanism for certain terminated auto dealers to seek relief through arbitration. If the dealer succeeds in the arbitration process, the manufacturer is required to enter into a letter of intent for a sales and service agreement with that dealer.
Auto Dealers Eligible for Arbitration
In a recently published opinion, Judge John K. Olson of the United States Bankruptcy Court for the Southern District of Florida permitted the bankruptcy estates of TOUSA, Inc. and its debtor subsidiaries to avoid and recover more than $1 billion of liens and cash that the debtors had transferred to secured lenders in a transaction entered into six months prior to the debtors’ chapter 11 bankruptcy filing. Official Committee of Unsecured Creditors of TOUSA, Inc. v. Citicorp North America, Inc., 2009 Bankr. LEXIS 3311 (Bankr. S.D. Fla. Oct. 13, 2009).
The current economy is bad for everybody, particularly small business owners who may not have an adequate equity base to draw on.
The Second Circuit Court of Appeals recently issued its decision on a question of first impression before the court: whether section 502(d) of the Bankruptcy Code applies to administrative claims arising under section 503(b) of the Bankruptcy Code. See, generally, ASM Capital, L.P. v. Ames Dept. Stores, Inc. (In re Ames Dept. Stores, Inc.), 582 F.3d 422 (2d Cir. 2009).
There are hundreds of hotel properties in special servicing or foreclosure and even more that are on the brink. When dealing with a distressed hotel property, there are several issues and opportunities to consider.
Receivership
On Friday, the Georgia Department of Banking and Finance closed RockBridge Commercial Bank, headquartered in Atlanta, Georgia, and the FDIC was named as receiver.