Bankruptcy Code § 365(d)(3) requires the trustee or the debtor in possession to "timely perform all the obligations of the debtor . . .arising from and after the order for relief under any unexpired lease of nonresidential real property, until such lease is assumed or rejected, notwithstanding section 503(b)(1)." In 2001 the Third Circuit construed this section to require the debtor to perform the lease in accordance with its terms. CenterPoint Properties v. Montgomery Ward Holding Corp. (In re Montgomery Ward Holding Corp.), 268 F.3d 205 (3d Cir. 2001).

On August 12, 2010, Caribbean Petroleum Corporation filed petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware. Caribbean Petroleum imports and distributes petroleum products in Puerto Rico through a network of 184 service stations. This post will look at the events leading up to the company's filing for bankruptcy, as well as what the company hopes to accomplish while in bankruptcy.

Introduction

Changes may be coming to the Bankruptcy Code that may affect secured creditors.^[1] In 2012, the American Bankruptcy Institute established a Commission to Study the Reform of Chapter 11 (the “ABI Commission”). The ABI Commission is 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.

In an adversary proceeding filed in the American Home Mortgage Holdings, Inc. bankruptcy case, the Delaware bankruptcy court affirmed that triangular setoffs are not allowed under the Bankruptcy Code and cannot be modified by contract or under the Bankruptcy Code’s safe harbor provision. In re American Home Mortgage Holdings, Inc., et al., Adv. Proc. No. 11-51851 (Bankr. D. Del. Nov. 8, 2013). Two contracts were at issue – a swap agreement between a bank and American Home Mortgage Investment Corp.

Few courts have construed the meaning of “repurchase agreement” as used in the Bankruptcy Code, so the recent HomeBanc¹ case out of the United States Bankruptcy Court for the District of Delaware is a must-read for “repo” counterparties. The principal issue in HomeBanc was whether several zero purchase price repo transactions under the parties’ contract for the sale and repurchase of mortgage-backed securities fell within the definition of a “repurchase agreement” in Section 101(47) of the Bankruptcy Code.

On Friday, the Office of Thrift Supervision closed First Arizona Savings, A FSB, headquartered in Scottsdale, Arizona, and appointed the FDIC as receiver.

On Friday, the Office of Thrift Supervision closed Maritime Savings Bank, headquartered in West Allis, Wisconsin, and appointed the FDIC as receiver for the bank.

On Friday, the Florida Office of Financial Regulation closed Sterling Bank, headquartered in Lantana, Florida, and appointed the FDIC as receiver for the bank. As receiver, the FDIC entered into a purchase and assumption agreement with IBERIABANK, headquartered in Lafayette, Louisiana, to assume all of the deposits of Sterling Bank.

The Federal Housing Finance Agency (FHFA) has proposed new rules to "codify the terms of conservatorship and receivership operations for Fannie Mae, Freddie Mac and the Federal Home Loan Banks," as required by the Housing and Economic Recovery Act of 2008.