Under Section 521(a)(2)(A) of the federal bankruptcy code, a debtor in a chapter 7 bankruptcy must file a statement within 30 days of the bankruptcy filing notifying the court, creditors and the trustee whether the debtor intends to retain or surrender property encumbered by a mortgage. In its October, 2016 decision in the case of In re Failla, the 11th Circuit Court of Appeals, in affirming rulings from the bankruptcy court and the federal district court, held that once a chapter 7 debtor elects to "surrender" mortgaged property, he is precluded from thereafter opposing
(6th Cir. Oct. 25, 2016)
What is a receivership?
Receivership is a legal term that usually connotes something is amiss, but most everyday people rarely come across it directly and typically don’t need to know what a receiver really is and what a receiver does. But, as the recent Hanjin situation demonstrated, receivership can directly impact multiple stages of the shipping, hauling, transport, distribution and warehousing of commercial goods at multiple levels.
In the decision of Motors Liquidation Co. Avoidance Action Trust v. JPMorgan Chase Bank, N.A. (In re Motors Liquidation Co.), 552 B.R. 253 (Bankr. S.D.N.Y. 2016), the SDNY bankruptcy court held that prepetition interest payments on a term loan did not qualify as “settlement payments” under Section 546(e) of the Bankruptcy Code.
(Bankr. W.D. Ky. Oct. 28, 2016)
The bankruptcy court enters an order holding in abeyance the motion to dismiss the Chapter 13 case. The court also denies confirmation of the proposed plan but holds the case open for further filings. The required maintenance payment could not be satisfied by the monthly payments in the proposed plan. Opinion below.
Judge: Lloyd
Attorneys for Debtor: Naber & Joyner, J. Gregory Joyner
Attorney for Creditor: Joseph S. Elder II
On October 27, 2016, Chief Judge Brendan L. Shannon of the Delaware Bankruptcy Court issued an opinion overruling objections to the claims of Seegrid’s former CEO. A copy of the Opinion is available here.
Among other strategic considerations a financially troubled company must grapple with as it prepares for a potential bankruptcy filing is how best to effectively implement necessary workforce reductions as part of its overall reorganization efforts. A workforce reduction could potentially give rise to severance and other employee obligations, and, under certain circumstances, could also give rise to significant WARN Act claims.
In our previous two news alerts,1 we examined decisions that potentially undermine key elements of the legal structures that lenders created in response to their experiences in the United States Bankruptcy Courts during the real estate downturn of 1988 through 1992, including the involuntary restructure of their indebtedness and liens under the cram-down provisions of title 11 of the United States Code (the “Bankruptcy Codeâ€).
“[T]he bankruptcy court did not abuse its discretion in denying [the debtor’s former employees’] motion to compel arbitration” when the dispute turned on the relative priority of their claims, held the U.S. Court of Appeals for the Second Circuit on Oct. 6, 2016. In re Lehman Bros. Holdings Inc., 2016 WL 5853265, *2 (2d Cir. Oct. 6, 2016). The Securities Investor Protection Act (“SIPA”) trustee in the liquidation of Lehman Brothers Inc.
In Princeton Office Park, the U.S. Court of Appeals for the Third Circuit affirmed the bankruptcy and district court rulings that the purchaser of a NJ tax sale certificate forfeited its claim and lien because it included the premium it paid to the State when it purchased the tax certificate.