On Friday, the Georgia Department of Banking and Finance closed Community Bank and Trust, headquartered in Cornelia, Georgia, and the FDIC was named receiver.

On Friday, the Georgia Department of Banking and Finance closed RockBridge Commercial Bank, headquartered in Atlanta, Georgia, and the FDIC was named as receiver.

Yesterday, the Georgia Departments of Banking and Finance closed United Security Bank, headquartered in Sparta, Georgia, and the FDIC was named as receiver.

On Friday, the OTS closed Vantus Bank, headquartered in Sioux City, Iowa, and the FDIC was named as receiver.

Yesterday, the House Judiciary Committee’s Subcommittee on Commercial and Administrative Law concluded its series of hearings on the ramifications of auto industry bankruptcies. Testifying before the committee were:

Panel I:

In an order dated May 7, 2009, Judge Arthur Gonzales approved Chrysler’s proposed bidding procedures for the sale of substantially all of the Company’s assets to a newly formed entity that would continue business under Chrysler’s name.

Reports on the White House administration and members of Congress have suggested that the Treasury Department is nearing a decision to provide assistance to at least two of the Big Three U.S. automakers.

Changes may be coming to the Bankruptcy Code’s safe harbor provisions.[1] In 2012 the American Bankruptcy Institute established a Commission to Study the Reform of Chapter 11 (the “ABI Commission”), composed of many well-respected restructuring practitioners, including two of the original drafters of the Bankruptcy Code, whose advice holds great weight in the restructuring community.

This week, the U.S. House of Representatives passed the Asbestos Bankruptcy Trust Transparency Bill. The legislation would, if enacted into law, require bankruptcy trusts to file quarterly reports with bankruptcy courts disclosing the names, asbestos-related exposure history, and basis of the victim’s claims for each claimant. These reports would be made available on the courts’ public dockets. Confidential medical records or social security information would not be disclosed.

The Upstream C Reorganization

In the late 20th century, the IRS made a combination of unrelated decisions resulting in a proliferation of upstream C reorganizations. First was the repeal of the Bausch & Lomb rule, meaning that the equity held by a parent corporation in its subsidiary could count as continuity of interest, thus allowing the liquidation of a subsidiary to be treated as an upstream C reorganization. Second, the invention of the check-the-box regulations made subsidiary liquidations (and hence upstream reorganizations) so much easier.