A recent Delaware bankruptcy court decision1 on the ability of “bankruptcy remote” single-purpose entities emphasizes the complicated nature of the bankruptcy process and the issues that need to be considered when using “bankruptcy remote” entities in funding structures. Given the prevalence of such entities, this is an important decision for all participants in the structured fi nance industry.
On May 5th, the Senate voted 93-5 to adopt an amendment proposed by Senators Christopher Dodd and Richard Shelby that would give the FDIC authority to liquidate failing financial institutions without the creation of a controversial $50 billion "bailout" fund. Instead, the FDIC would use a new line of credit with the Treasury Department, supported by the assets of the failed institution, to pay the liquidation expenses.
In In re Kohls, 2007 LEXIS 76 (Bankr NDWVa 2007), the debtor filed this adversary proceeding against the Bank to cancel indebtedness and recover damages related to a $34,864 loan that the Bank made to the Debtor on the grounds that the loan was unconscionable at the time it was executed in violation of W. Va. Code § 46A-2-121.
Friday, the Florida Office of Financial Regulation closed The Bank of Bonifay, headquartered in Bonifay, Florida, and the FDIC was appointed receiver. As receiver, the FDIC entered into a purchase and assumption agreement with First Federal Bank, headquartered in Lake City, Florida, to assume all of the deposits of The Bank of Bonifay.
Friday, the California Department of Financial Institutions closed 1st Pacific Bank of California, headquartered in San Diego, California, and the FDIC was appointed receiver.
This paper is designed to provide a brief update of recent decisions of note that concern various ethical issues bankruptcy attorneys often encounter, focusing on conflicts of interest and privilege issues.
Following an initial FINRA arbitration award holding Steven Singer liable to Hartford Financial Holdings for compensatory damages, Mr. Singer filed Chapter 7 bankruptcy. After a complicated procedural history, the Bankruptcy Court granted relief from the automatic stay and allowed Hartford to proceed with this action in US District Court for the Southern District of New York.
On Friday, the Michigan Department of Financial and Insurance Services closed the Bank of Ann Arbor, headquartered in Ann Arbor, Michigan, and appointed the FDIC as receiver. As receiver, the FDIC entered into a purchase and assumption agreement with Bank of Ann Arbor, headquartered in Ann Arbor, Michigan, to assume all of the deposits of New Liberty Bank.
On Friday, the Missouri Division of Finance closed Southwest Community Bank, headquartered in Springfield, Missouri .