In the latest decision to emanate from the Madoff bankruptcy, the United States District Court for the Southern District of New York denied the appeal of a protective order that relieved Irving Picard—the court-appointed trustee—from answering discovery requests regarding his compensation arrangement with his law firm.
When an adversary proceeding is transferred to the district court pursuant to a withdrawal of the reference, which rules—and deadlines—apply: those contained within the Federal Rules of Civil Procedure, or those contained within the Federal Rules of Bankruptcy Procedure? The Eleventh Circuit recently held the Federal Rules of Bankruptcy Procedure, not the Federal Rules of Civil Procedure, govern adversary proceedings before the district courts. Rosenberg v. DVI Receivables XIV, LLC, 2016 WL 1392642 (11th Cir. 2016).
UNITED STATES SUPREME COURT
Wellness Int'l Network, Ltd. v. Sharif, 135 S. Ct. 1932 (2015)
Key Issue: Post-Stern v. Marshall, whether a Bankruptcy Court (as an Art. I court) has a proper delegation of authority from the District Court (as an Art. III court) to enter findings of fact and final orders on non-core issues upon the consent of the parties and, if so, whether consent must be express or may be implied?
Market participants involved in distressed exchange offers have become accustomed to grappling with the implications of Trust Indenture Act Section 316(b) in the context of potential exit consents, i.e., are the contemplated amendments to the indenture governing the securities subject to the exchange significant enough to impair or affect the right of a holder to receive payment of principal and interest on or after the due dates of the relevant note?
Official Comm. of Unsecured Creditors of Arcapita, Bank. B.S.C. v. Bahr. Islamic Bank, No. 15-cv-03828 (S.D.N.Y. Mar. 30, 2016) [click for opinion]
In this exciting age of startups, the market is brimming with opportunities for individuals and entities alike to invest in emerging companies. Today’s rapid rate of technology development justifies investors’ eagerness to take an interest in innovative companies, hoping to find the next “unicorn.” Notwithstanding the fast pace of the tech industry, it remains important for investors to conduct due diligence before kicking funds into any business, especially when bargaining for a security interest or license.
“Whoever is careless with the truth in small matters cannot be trusted with important matters.”
– Albert Einstein
The Seventh Circuit Court of Appeals in Unsecured Creditors Committee of Sparrer Sausage Co., Inc. v. Jason’s Foods, Inc., 2016 WL 3213090 (7th Cir. June 10, 2016) expanded the scope of the ordinary course defense in a bankruptcy preference action. This case provides an excellent road map for a creditors’ rights attorney defending a preference suit and suggests arguments for increasing the payments a creditor can retain even if those payments were made during the 90-day preference period.
On July 18, 2016, Judge Walrath issued a concise written opinion ruling upon whether an executive’s claim for unpaid stock-based compensation was an equity security or rather a general unsecured claim against the Debtors’ estate. The opinion is styled as GSE Environmental, Inc., et al. v. Sorrentino (In re GSE Environmental, Inc., et al.), Adv. Pro. No. 16-50377 (MFW) (Bankr. D. Del.
The U.S. Court of Appeals for the Eighth Circuit recently held that “[a]n accurate and complete proof of claim on a time-barred debt is not false, deceptive, misleading, unfair, or unconscionable under the FDCPA.”
In arriving at this holding, the Court declined to follow the Eleventh Circuit’s rulings in Crawford and Johnson.
A copy of the opinion is available at: Link to Opinion.