On April 28, 2017, the California Legislature passed Senate Bill No. 496, which limits the defense and indemnity obligations of design professionals who enter into contracts to perform design professional services on or after January 1, 2018. Existing law limits design professional defense and indemnity obligations for contracts entered into with public agencies to claims that arise out of, pertain to, or relate to the negligence, recklessness or willful misconduct of the design professional.
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.
It’s no secret that Kmart is facing another liquidity crisis. Just over ten years after Sears rescued the discount retailer from bankruptcy in 2006, the pioneer of the “blue light special” is destined for another, and perhaps last, going out of business sale. Earlier this year, the company publicly disclosed its inability to avoid insolvency stating: “Our historical operating results indicate substantial doubt exists related to the Company’s ability to continue as a going concern.” In other words, Kmart knows its heading for that blue light special in the sky.
After several years of drafting, debate, compromise and fine tuning, it appears that major changes to the administration of consumer bankruptcy cases are imminent. On April 27, 2017, Chief Justice John Roberts submitted to Congress amendments to the Federal Rules of Bankruptcy Procedure that will have a profound impact on consumer bankruptcy cases.
Bond indentures and loan agreements often include make-whole provisions to provide protection to lenders and investors in the event of debt repayment prior to maturity. Make-whole provisions work to compensate the investor/lender for any future interest lost when the issuer/borrower repays the note prior to a specific date.
Following the commencement of an involuntary proceeding against the company by certain creditors in Illinois, Central Grocers, Inc., a retail food cooperative and distributor founded in 1917, and 11 of its affiliates, has filed for chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware (Lead Case No. 17-10993 BLS). The petition lists between $100 million and $500 million in both assets and liabilities.
Practitioners Beware: When a client located in the state in which you practice law is served with a subpoena from a federal court located in another state, only the relevant federal court in your state (whether district or bankruptcy court) can adjudicate a motion to quash or otherwise modify the subpoena. A recent decision from a Colorado bankruptcy court, In re SBN Fog Cap II, LLC, 562 B.R. 771 (Bankr. D. Colo.
On May 2, 2017, the Sixth Circuit Court of Appeals clarified whether a bankruptcy debtor retains any property rights in rents after defaulting on a loan that includes an assignment of rents.
David Conaway [email protected] 704.945.2149 Manufacturing Customers Vendors Supply Chain Insolvency Litigation Commercial and Financial Contracts Cross-Border
BACKGROUND
Searchmetrics, Inc., a search engine optimization services company based in San Mateo, CA, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Case No. 17-11032-CSS). The Petition estimates Searchmetric’s assets between $1–$10 million and its liabilities between $10-$50 million.