A recent bankruptcy case in Pennsylvania,In re Shubh Hotels Pittsburgh, LLC, 439 B.R. 637 (Bankr. W.D. Pa. 2010), held that as long as the “debtor-in-possession” exercises its sound business judgment when making its decision, the “debtor-in-possession” can enter into a new 15-year franchise agreement over the objection of the secured lender.
Summary
In a 10 page decision signed May 5, 2011, Judge Walsh of the Delaware Bankruptcy Court denied a motion to dismiss and held that the plaintiff Litigation Trustee satisfied the “particularity” requirements of Federal Rules of Civil Procedure 12(b)(6) and 9(b), despite having his complaint allege that each transfer within a 13 page list of transfers was fraudulent. Judge Walsh’s opinion is available here (the “Opinion”).
On April 27, 2011, the United States Supreme Court approved certain amendments to Bankruptcy Rule 2019 requiring disclosures by certain creditors and equity holders in Chapter 11 cases. We expect that amended Rule 20191 (“Amended Rule 2019”) will take effect as a matter of law on December 1, 2011 unless in the interim Congress enacts legislation to reject, modify, or defer the rules, which we view as unlikely.
Some victims of the now infamous Bernard L. Madoff ("Madoff") Ponzi scheme may receive a partial distribution in the next few months. On May 4, 2011, Irving H. Picard, the Trustee appointed for the liquidation of the business of Bernard L. Madoff Investment Securities LLC ("BLMIS") under the Securities Investor Protection Act, 15, U.S.C.
Recently, some bankruptcy courts in Ohio have given mortgage lenders something new to be concerned over: Is the form of your notary’s certification proper? Everyone in the mortgage industry is aware of the wave of cases challenging the validity or effectiveness of certain mortgages or mortgage assignments on account of sub-standard execution, notarization and recordation practices.
Wiley Rein LLP partner H. Jason Gold, the chapter 11 bankruptcy trustee in the mortgage fraud and Ponzi scheme case of Vijay Taneja, announced today that he has reached settlements with 11 defendants in the 60 lawsuits he filed last year seeking to recover tens of millions of dollars for the benefit of Mr. Taneja's creditors.
Summary
In In re Young Broadcasting, Inc., et al., 430 B.R. 99 (Bankr. S.D.N.Y. 2010), a bankruptcy court strictly construed the change-in-control provisions of a pre-petition credit agreement and refused to confirm an unsecured creditors' committee's plan of reorganization, which had been premised on the reinstatement of the debtors' accelerated secured debt under Section 1124(2) of the Bankruptcy Code.
In a recent decision, the Bankruptcy Court for the Southern District of New York concluded that an investor in a Real Estate Mortgage Investment Conduit ("REMIC") lacked standing to object to the sale of a chapter 11 debtor's real property, despite that the property served as collateral for loans held in trust by the REMIC for the benefit of its investors.
Under section 363 of the Bankruptcy Code, a trustee or debtor-in-possession may sell property free and clear of “any interest in such property of an entity other than the estate.” Thus, a buyer can generally acquire assets from a bankruptcy estate without subjecting itself to liability or claims based on the seller’s prior actions. InMorgan Olson, LLC v. Frederico (In re Grumman Olson Indus., Inc.), No. 02-16131, 2011 WL 766661 (Bankr. S.D.N.Y.