Since at least the Delaware Supreme Court’s 2007 landmark decision in N. Am. Catholic Educ. Programming Found., Inc. v. Gheewalla, 930 A.2d 92, 101 (Del.

Recently, Corinthian Colleges, Inc., one of the United States' largest for-profit educational conglomerations with 72,000 students across 107 campuses, filed (along with 25 affiliated subsidiaries) a chapter 11 voluntary petition for bankruptcy protection. Corinthian reported $19.2 million of total assets and US$143.1 million of total debts, and plans to liquidate.

Introduction

Nothing says “closure” quite like a termination agreement reaffirmed by a bankruptcy court – right?

The U.S. Bankruptcy Court for the Northern District of Illinois recently held in Krol v.

More Clarity for Delaware Directors When Considering Restructuring Transactions

SUMMARY

In Quadrant Structured Products Co., Ltd. v. Vertin (May 4, 2015) (“Quadrant”), the Delaware Court of Chancery confirms – again – that ordinary corporate fiduciary duties govern the conduct of directors of an insolvent corporation, rather than a special duty to creditors. The Court also clarifies the circumstances in which creditors may have derivative standing to enforce those fiduciary duties on behalf of an insolvent corporation.

Jackie Ford, partner in the Vorys Houston and Columbus offices, authored an article for Law360 onwhether traditional definitions of property and ownership include social media accounts. The full text of the article is included below.

WHO OWNS LIKES, POSTS, PAGES AND TWEETS IN BANKRUPTCY?

In a May 4, 2015, decision, the U.S. District Court for the Southern District of New York rejected secured lenders’ appeals of a controversial bankruptcy court decision confirming the Chapter 11 plan of reorganization of MPM Silicones, LLC (also known as “Momentive”). The district court opinion, by Judge Vincent Briccetti, affirms the bankruptcy court’s decision that Momentive’s senior secured lenders could be “crammed down” at a below-market interest rate, without payment of a make-whole premium.

While section 503(b)(9) claims deserve priority payment over general unsecured claims, they do not provide a basis for stripping a debtor’s defenses in determining the allowed amount of a section 503(b)(9) claim.

Note: Pepper Hamilton LLP serves as co-counsel to the Official Committee of Unsecured Creditors (the Committee) in the ADI case. The views expressed herein are solely those of the authors and not of the Committee.

The U.S. Bankruptcy Court for the Southern District of Florida recently held that a wholly unsecured second mortgage lien may be “stripped off,” even if the property encumbered by the lien is no longer part of the bankruptcy estate due to abandonment by the bankruptcy trustee.

The Bankruptcy Court did not specifically reference the consolidated cases now before the U.S. Supreme Court in Bank of Amer. v. Toledo-Cardona, and Bank of Amer. v. Caulkett, which should resolve the issue of whether a wholly unsecured lien may be stripped off in a Chapter 7 bankruptcy.