Tribal economies are not immune to the recent global financial crisis and economic downturn. The Indian gaming industry was hit especially hard. After consistent year-over-year growth in tribal gaming revenues during the 1990s and continuing through 2008, industry revenues declined in 2009 and have continued to stagnate. Amid reports of several tribal casino defaults—and many more tribes with significant debt maturing in the near future that will need to be restructured—tribes and creditors must consider two questions: Are tribes and their corporations eligible for bankruptcy?
On February 16, 2011, the Third Circuit affirmed a Delaware bankruptcy court's order determining the value of mortgage loans in the context of a 2006 repurchase agreement. Buyer Calyon argued that the mortgage loan portfolio sold to it by American Home Mortgage had a market price of only $670 million, as compared to its $1.15 billion contractual repurchase price, and that American Home Mortgage was required to pay Calyon the $480 million difference under a repo agreement.
On February 7, 2011 the United States Court of Appeals for the Second Circuit issued its eagerly awaited opinion in the consolidated appealIn re: DBSD North America, Inc., Docket Nos. 10-1175, 10-1201, 10-1352, 2010 U.S. App. LEXIS 27007.
In a ruling that borrowers may try to use in seeking to delay foreclosures or bankruptcy proceedings on proofs of claim, the U.S. Bankruptcy Court for the Eastern District of New York finds that the Mortgage Electronic Registration System (MERS) lacks authority to assign mortgages.
Business structures are often reorganized to assist in isolating liabilities, support discrete product brands and address favorable tax environments. However, in certain fact situations, unintended Tennessee excise tax consequences can result from certain reorganizations. Such was the outcome of the Tennessee Supreme Court's recent decision in Blue Bell Creameries, LP v. Richard Roberts, Commissioner of Revenue, published January 24, 2011.
The Holding
On February 16, 2011, the United States Court of Appeals for the Third Circuit ruled that a discounted cash flow analysis constituted “a commercially reasonable determinant[] of value” for purposes of section 562(a) of the United States Bankruptcy Code.1 In so doing, the court upheld the United States Bankruptcy Court for the District of Delaware decision sustaining the objection of American Home Mortgage Holdings, Inc.
As discussed in previous posts on this site, back in December the Second Circuit Court of Appeals issued a summary order that reversed the bankruptcy court’s confirmation of the reorganization plan (the “Plan”) of DBSD North America, f/k/a ICO North America (“DBSD”).
On February 10, 2011, the United States Bankruptcy Court for the Eastern District of New York issued a memorandum decision addressing whether the alleged holder of a mortgage loan had sufficient status as a secured creditor to seek relief from the automatic stay to pursue a foreclosure action.1 After resolving the primary issue in controversy on purely procedural grounds and granting the requested relief, the Court analyzed whether an entity that acquires its interest in a mortgage loan through an assignment from Mortgage Electronic Registration Systems, Inc.
What is credit bidding? Distilled to its most basic level, Section 363(k) of the Bankruptcy Code gives a secured creditor the right to use up to the full amount of the debt owed to the secured creditor by the debtor as currency in a bankruptcy auction sale of the collateral securing the debt owed to the secured creditor.
On Feb. 18, 2011, the Seventh Circuit Court of Appeals (the “Circuit Court”) held that (i) an assignment of unsecured contract claims from AT&T to ReGen Capital I, Inc. (“ReGen”) was broad enough to include right to receive “cure” payments in the event the debtor, UAL Corporation (“United”), assumed the underlying executory contracts, but (ii) ReGen could not successfully assert a “cure” claim because United had not assumed the executory contracts, even though United’s confirmed plan of reorganization included them on a list of assumed contracts. ReGen Capital I, Inc. v. UAL Corp.