On April 29, 2021, the United States Court of Appeals for the Fourth Circuit issued its decision in Siegel v. Fitzgerald (In re Circuit City Stores, Inc.), Case No. 19-2240 (4th Cir. Apr. 29, 2021), upholding the constitutionality of a 2017 law that substantially increased the quarterly fees debtors are required to pay to the Office of the United States Trustee (the “US Trustee”) in chapter 11 bankruptcy cases.

Overview

On 12 May 2021, the High Court sanctioned three inter-conditional restructuring plans, under the Part 26A of the Companies Act 2006, for certain English subsidiaries of the Virgin Active group, despite major opposition of certain landlords.[1] In the landmark decision, the High Court exercised its discretion to cram-down multiple classes of dissenting landlords in each plan, compromising their claims.

The Northern District of Illinois recently denied a motion to dismiss a FCRA claim finding that the complaint sufficiently alleged that the defendant did not have a “permissible purpose” to access the plaintiff’s credit report for collection of a mortgage debt that the plaintiff alleged was previously discharged in bankruptcy. In Andrea Billups v. PHH Mortgage Corporation, No. 19 C 7873, 2021 WL 1648114 (N.D. Ill. Apr. 27, 2021), the plaintiff alleged that the Defendant mortgage server violated 15 U.S.C.

In recognition of the 15th anniversary of the passage of chapter 15 of the Bankruptcy Code, the New York City Bar Association’s Bankruptcy & Corporate Reorganization Committee hosted a webinar on May 12, 2021 to discuss the current state of chapter 15 cases and potential, corresponding and significant future developments.[1]Several dozen participants joined a panel of distinguished leaders in the field: the Honorable Allan Gropper, former United

The Bankruptcy Court for the Northern District of Texas dismissed the National Rifle Association’s (“NRA”) bankruptcy case on May 11, finding that the case was not filed in good faith. In his opinion, Judge Harlin Hale found that there was cause for dismissal because the case was filed “to gain unfair litigation advantage and … to avoid a state regulatory scheme,” neither of which he considered to be a purpose intended or sanctioned by the Bankruptcy Code.

On May 14, 2021, Gateway Kensington LLC, filed a petition under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Southern District of New York (Case No. 21-22274).

The United States Bankruptcy Court for the Southern District of Texas recently clarified the administrative expense standard applicable to indenture trustees by holding that they can recover fees and expenses as administrative expenses only when they make a “substantial contribution.” This standard requires a greater showing than “benefit to the estate,” which is the general administrative expense standard. In re Sanchez Energy Corp., No. 19-34508 (Bankr. S.D. Tex. May 3, 2021).

Background

Welcome to the first Akin Gump client alert sub-titled Make (Whole) a Minute. These alerts are designed to be short digestible updates or commentaries on topics of interest to the institutional investment community that take a minute (or two) to read. And who doesn’t love Make-Whole and a good play on words?

On March 19, in a matter of first impression, the Third Circuit Court of Appeals (Court) held that triangular setoff is not permissible in bankruptcy due to Bankruptcy Code Section 553(a)’s mutuality requirement, and that parties cannot evade that requirement by contracting around it. See In re Orexigen Therapeutics, Inc., 990 F.3d 748 (3d Cir. 2021).

On April 19, 2021, the United States Supreme Court denied a petition for certiorari from the Second Circuit’s decision in In re Tribune Company Fraudulent Conveyance Litigation (“Tribune II”),[1] leaving intact the Second Circuit’s decision upholding the safe harbor defense to avoidance actions und