(Bankr. W.D. Ky. Oct. 3, 2016)

Companies that sell goods or extend credit to customers expect to be paid. When customers become insolvent, or file for Chapter 11 protection, those expectations are no longer realistic. Yet, there are a number of "creditor remedies" that can be utilized to maximize recovery from the insolvent customer. This article addresses one such "remedy": a carve-out from the pre-petition secured lender.

Summary

The U.S. Court of Appeals for the Fifth Circuit recently held that a Creditor Exclusion provision in D&O insurance coverage may result in significant limitations on the coverage provided to the D&Os, when the underlying dispute is with a creditor in its capacity as such.

The United States Court of Appeals for the Third Circuit recently reaffirmed that a foreclosure action commenced more than six years after the loan was accelerated could still be within the applicable statute of limitations. SeeIn re: Gordon Allen Washington; Gordon Allen Washington v. Bank of New York Mellon, As Tr. for the Certificate-Holders of the CWABS, Inc., Asset-Backed Certificates, Series 2007-5, 2016 WL 5827439 (3d Cir. Sept. 30, 2016). In the case, the borrowed executed a mortgage and promissory note in February 2007.

(6th Cir. B.A.P. Sep. 30, 2016)

Vendors — take note! The Delaware bankruptcy court in In re Reichhold Holdings US Inc. recently issued an important ruling for vendors asserting reclamation rights.

Over three years ago, in September 2013, Pirinate Consulting Group LLC, in its capacity as Litigation Trustee (the “Trustee”) of the NewPage Creditor Litigation Trust, began filing complaints in the Delaware Bankruptcy Court seeking the avoidance and recovery of what the Trustee alleges are preferential transfers.

On October 4, 2016, the Eleventh Circuit Court of Appeals ruled that chapter 7 debtors who file a statement of intention to surrender real property in bankruptcy cannot later contest a foreclosure action, and bankruptcy courts have broad power and authority to sanction violations. Failla v. CitiBank, N.A., case no. 15-15626 (11th Cir. October 4, 2016).

On 2 September 2016, Hanjin filed a petition under Chapter 15 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Jersey, seeking recognition of its Korean rehabilitation proceedings as a "foreign main proceeding." Hanjin also sought provisional and final relief to prevent creditors from taking enforcement actions against Hanjin's interests within the jurisdiction of the United States.