On May 1, 2017, the U.S. Supreme Court agreed to hear Merit Management Group v. FTI Consulting, No. 16-784, on appeal from the U.S. Court of Appeals from the Seventh Circuit. The Court's decision could resolve a circuit split as to whether section 546(e) of the Bankruptcy Code can shield from fraudulent conveyance attack transfers made through financial institutions where such financial institutions are merely "conduits" in the relevant transaction.
On November 17, 2016, the Third Circuit Court of Appeals issued a highly anticipated ruling in the chapter 11 reorganization of Energy Future Holdings Corp. ("EFH"), invalidating one of the aspects of EFH’s confirmed chapter 11 plan. InDel. Tr. Co. v. Energy Future Intermediate Holding Co. LLC (In re Energy Future Holdings Corp.), 842 F.3d 247 (3d Cir. 2016), a three-judge panel of the Third Circuit reversed lower court rulings disallowing the claims of EFH’s noteholders for hundreds of millions of dollars in make-whole premiums allegedly due under their indentures.
The U.S. Supreme Court has handed down two rulings thus far in 2016 (October 2015 Term) involving issues of bankruptcy law. In the first, Husky Int’l Elecs., Inc. v. Ritz, 194 L. Ed. 2d 655, 2016 BL 154812 (2016), the Court addressed the scope of section 523(a)(2)(A) of the Bankruptcy Code, which bars the discharge of any debt of an individual debtor for money, property, services, or credit to the extent obtained by "false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition."
More than a decade after the enactment of chapter 15 of the Bankruptcy Code, issues pertaining to recognition of a foreign debtor’s bankruptcy or insolvency proceeding under chapter 15 have, in large part, shifted from the purely procedural inquiry (such as the foreign debtor’s center of main interests, or “COMI”) to more substantive challenges regarding the limits, if any, that chapter 15 places on U.S. bankruptcy courts. But as demonstrated by the recent ruling in In re Creative Finance Ltd. (In Liquidation), 2016 BL 8825 (Bankr. S.D.N.Y. Jan. 13, 2016), U.S.
Argentina
The long-running dispute continues between Argentina, which defaulted on its sovereign debt for the second time in July 2014, and holdout bondholders from two previous debt restructurings.
The long-running dispute over the payment of Argentina’s sovereign debt, on which the South American nation defaulted for the second time in July 2014, continues to be particularly active.
BUSINESS RESTRUCTURING REVIEW VOL. 21 • NO.
In yet another chapter in the tortured saga of the fallout from the failed 2007 leveraged buyout ("LBO") of media giant The Tribune Co. ("Tribune") in a transaction orchestrated by real-estate mogul Sam Zell, the U.S. Court of Appeals for the Second Circuit largely upheld lower court dismissals of claims asserted by Tribune's chapter 11 liquidation trustee against various shareholders, officers, directors, employees, and financial advisors for, among other things, avoidance and recovery of fraudulent and preferential transfers, breach of fiduciary duties, and professional malpractice.
There is longstanding controversy concerning the validity of release and exculpation provisions in non-asbestos trust chapter 11 plans that limit the potential exposure of various parties involved in the process of negotiating, implementing and funding the plan. The U.S. Bankruptcy Court for the Eastern District of Washington recently contributed to the extensive body of case law addressing these issues in In re Astria Health, 623 B.R. 793 (Bankr. E.D. Wash. 2021).
Courts sometimes disagree over whether provisions in a borrower's organizational documents designed to prevent the borrower from filing for bankruptcy are enforceable as a matter of federal public policy or applicable state law. There has been a handful of court rulings addressing this issue in recent years, with mixed results.