Venezuela’s initiative is unlikely to set the stage for a restructuring of international obligations in the face of US sanctions.

Key Points:

• US sanctions will prohibit US persons from engaging in a restructuring of Venezuela and PdVSA debts that includes the issuance of “new” long term debt.

• Creditors should expect that enforcement action will follow a default. The outcomes of that enforcement action will affect all stakeholders, whether or not they participate.

Restructuring Announcement

The U.S. Court of Appeals for the First Circuit recently overturned its own prior guidance to hold that an official creditors’ committee had an unconditional statutory right to intervene in an adversary proceeding. The First Circuit joined the Second and Third Circuits to recognize that the right to intervene provided by the Bankruptcy Code is not limited to the main bankruptcy case, contrary to the long-standing rule in the Fifth Circuit. However, the First Circuit also held that the scope of intervention may be qualified, with limits set by the trial court on a case-by-case basis.

The Bankruptcy Code limits in many ways the rights of nondebtors under contracts with a debtor in bankruptcy. There are, however, some crucial exceptions, which Congress deemed important for the orderly function of the securities markets. In particular, agreements governing securities repurchase (or repo) transactions involving a financial institution may be terminated and liquidated notwithstanding the bankruptcy filing of the repo seller.

On October 3, 2017, Bankruptcy Judge Laurie Selber Silverstein of the United States Bankruptcy Court for the District of Delaware issued a decision holding that the Bankruptcy Court had constitutional authority to approve third-party releases in a final order confirming a plan of reorganization.

If a debtor seeks to sell, pursuant to a 363 sale, real property as to which it is the landlord under an unexpired prepetition lease, can such property be sold “free and clear” of the non-debtor tenant’s leasehold interest?

History: In a June 14, 2017, bankruptcy blog titled “Six Degrees of Separation: Use of Bankruptcy Rule 2004 Examination in Connection with Third-Party Litigation“, we reported on what appeared to be a case of first impression that arose in a case pending before United States Bankruptcy Judge Stuart Bernstein in the United States Bankruptcy Court for the Southern Distr

It is a unique characteristic of debt restructuring under Chapter 11 of the Bankruptcy Code that a majority of a class of creditors can accept a modification of the terms of the debts owed to the class members, as provided in a plan of reorganization, and thereby bind non-accepting class members.[1] The ordinary route to confirming a Chapter 11 plan is to obtain its acceptance by a majority of every impaired class of creditors and equity hold

Two proposed bills are working their way through the Michigan Legislature that would significantly impact state law pertaining to commercial real estate receiverships.

Specifically, House Bills 4470 and 4471 were approved by the Michigan House of Representatives in early November 2017 and have been sent to the State Senate for consideration.

Back in July of 2015, Curtis James Jackson, III, more commonly known as 50 Cent, filed for Chapter 11 bankruptcy relief in the United States Bankruptcy Court for the District of Connecticut, a little over two months after he was ranked fourth in the list of wealthiest hip-hop artists by Forbes. Jackson’s filing came on the heels of a New York state court ruling against him for $5 million in favor of Lastonia Leviston (plus $2 million in punitive damages that were later awarded post-petition) for impermissibly posting a sex tape online.

(Bankr. S.D. Ind. Oct. 20, 2017)

The bankruptcy court dismisses the debtor’s complaint against the lender, which asserted claims related to the lender’s foreclosure of its mortgage lien in state court. The court dismisses the stay violation claim, because the property was not property of the estate at the time of the alleged acts, and dismisses the remaining claims because the court lacks subject-matter jurisdiction. Opinion below.

Judge: Carr

Attorney for Debtor: Sawin, Shea & Des Jardines LLC, J. Andrew Sawin