Receiverships are on the rise in Ohio and across the Midwest. In most cases, the appointment of a receiver heralds the close of a business. Receiverships are also commonly part of a foreclosure proceeding. Calfee's Business Restructuring and Insolvency practice group lawyers have extensive experience with both state and federal court receiverships and we can assist you in determining the impact of a receivership on your business.

On October 21, 2010, the New York Court of Appeals (the Appeals Court), New York’s highest appellate court, addressed two appeals, and then issued an important ruling regarding the parameters of the affirmative defense of in pari delicto in suits against outside auditors, holding that the doctrines of in pari delicto and imputation are a complete bar to recovery when the corporate wrongdoer’s actions are imputed to the company.

The Doctrines of In Pari Delicto and Imputation

In 2007, the Delaware Supreme Court issued an important ruling for creditors of insolvent corporations. It held that such creditors had standing to assert derivative claims for breaches of fiduciary duties against directors of an insolvent corporation.1 But, as the Delaware Court of Chancery recently made clear, there is a big difference between Delaware limited liability companies (LLCs) and their corporate cousins.

In September 2010, the District Court for the Eastern District of Virginia denied a reclaiming seller rights despite the claimant’s service of a timely written reclamation demand and compliance with a reclamation procedures order and section 546(c) of the Bankruptcy Code.

Section 546(c) of the Bankruptcy Code provides that:

Summary

In a 15 page decision signed yesterday, April 5, 2011, Judge Sontchi of the Delaware Bankruptcy Court determined that when a company receives pleadings in a bankruptcy case, even if served on their “doing business as” name, they have received proper service. Judge Sontchi’s opinion is available here.

Background

On March 29, 2011, the Federal Deposit Insurance Corporation (the “FDIC”) and the Board of Governors of the Federal Reserve System (the “Fed”) jointly released a notice of proposed rulemaking (“NPR”) proposing rules relating to the resolution plan (also known as the “living will”) and credit exposure report requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “DFA”).

A California federal district court granted temporary injunctive relief, requiring the purchaser of a bankrupt hospital to temporarily recognize and bargain with the union that represented nurses employed by the hospital’s seller, pending the outcome of a National Labor Relations Board (“NLRB”) hearing.

On February 11, 2011, the Hon Alan Gold of the United States District Court for the Southern District of Florida issued a 113 page opinion and order quashing the bankruptcy court's order requiring the lenders involved in TOUSA, Inc.'s Transeastern joint venture to disgorge, as fraudulent transfers under Section 548 of the Bankruptcy Code, settlement monies that they had received on July 31, 2007 in repayment of their existing debt and to pay prejudgment interest on such monies, for a total disgorgement in excess of $480 million.

It has become common in financings for companies to utilise a capital structure with multiple layers or tranches of debt.

Earlier this month, Avidity Partners, LLC ("Avidity"), in its role as claims agent for the bankruptcy estates of AbitibiBowater, Inc, et al ("Debtors"), began filing avoidance actions against various defendants. As alleged in the complaints, on April 16, 2009, Debtors filed petitions for bankruptcy with the United States Bankruptcy Court for the District of Delaware.