District Court Confirms Bankruptcy Court’s Constitutional Authority to Approve Millennium Plan Releases, Dismisses as Equitably Moot Opt-Out Lenders' Remaining Issues on Appeal

The Bottom Line

On July 31, 2018, the International Swaps and Derivatives Association published the ISDA 2018 US Resolution Stay Protocol. The US Protocol is intended to enable parties to ISDA Master Agreements and similar "Protocol Covered Agreements" (collectively, PCAs) to contractually recognize the cross-border application of special resolution regimes applicable to global systemically important entities and their affiliates.

In this alert, we provide a broad overview of the US Protocol and relevant resolution stay rules, then describe the effect and operation of the US Protocol.

In the recent decision William R. Lee Irrevocable Trust v. Lee (In re Lee), the Seventh Circuit Court of Appeals affirmed a bankruptcy court’s decision (also affirmed by the district court) piercing a non-debtor’s corporate veil and allowing a creditor of the non-debtor to participate in the bankruptcy of the corporation’s individual shareholder.

The U.S. Court of Appeals for the Eleventh Circuit held that 12 U.S.C. § 1715z-20(j) did not alter or limit the lender’s right to foreclose under the terms of the valid reverse mortgage contract where the non-borrower spouse was still living in the home.

Accordingly, the Eleventh Circuit affirmed the trial court’s dismissal of the plaintiff’s petition for injunctive relief to prevent the foreclosure sale.

The fact that an entity to be acquired is going through a bankruptcy process does not change the filing requirements under the Hart-Scott-Rodino Antitrust Improvements Act (“HSR”). However, if the entity is going through a bankruptcy under Section 363(b) of the Bankruptcy Code (11 U.S.C. §363(b)), the HSR process is governed by a 15-day waiting period, as opposed to the 30-day waiting period that applies to transactions that are not occurring under Section 363(b) of the Bankruptcy Code.

On September 15, 2008, Lehman Brothers declared bankruptcy, an event considered by many to mark the beginning of the credit crisis of 2008–2009 and the unprecedented public policy responses that followed. Much has been written about the multiple contributing factors to the crisis, ranging from predatory lending to Federal Reserve interest rate policy.

We have discussed plan releases in prior posts. Oftentimes, disputes involving plan releases revolve around whether, and in what contexts, third-party releases in plans are appropriate. Recently, the Third Circuit Court of Appeals addressed the relatively unique question of whether releases in a confirmed plan are binding upon post-confirmation purchasers of the debtor’s stock.

Two years ago, after a slew of bankruptcies in the energy sector triggered by a dramatic drop in commodity prices during the worst downturn for U.S. energy producers since the 1980’s, the Office of the Comptroller of the Currency (OCC) issued new guidance that proposed changes to underwriting analysis and loan risk rating determinations by national banks and federal savings associations of loans secured by oil and gas reserves (RBLs).

1 Driven by a concern that banks were not appropriately capturing risks associated with increased

The current, ultimate dilemma in the health care reimbursement legal arena is the catastrophically long wait for a hearing with an Administrative Law Judge (“ALJ”) with the Office of Medicare Hearings and Appeals (“OMHA”). The estimated wait time for an ALJ hearing after completing the first two levels of appeal is now more than 1,200 days, and the debt being appealed accrues interest at 10.5% the entire time. Moreover, CMS will continue to recoup against new Medicare claims during the three-year wait for a decision-maker that overturns far more decisions than the first two levels.