Judge Drain’s recent bench rulings in Momentive Performance Materials in 2014 generated a great deal of controversy in the distressed debt world. Distressed investors, lenders, and commentators have questioned whether the Momentive rulings will lead to an industry trend in which debtors seek to cram down their secured lenders to take advantage of the ability to do so at below market interest rates.
This is a good ‘war story’ about getting paid. The client was (and is) based in the European Union, and they sold product to the US market. Their products were (and are) high-value, about $100,000+ per item. Not stuff I’d be able to buy, but I digress. The company insisted–strongly–on using their ‘home country’ terms and conditions of sale in the US, without thoroughly reviewing whether there was anything in the home country law that could adversely affect them in the US. We were not involved at that point.
The Supreme Court is currently considering the case of Wellness International Network, Ltd. v. Shariff.
I. Introduction
Effective March 23, 2015, Ohio’s antiquated receivership statute (Ohio Rev. Code Chapter 2735) will be modernized, particularly as it relates to the appointment of a receiver in commercial mortgage foreclosures and the ability of a receiver to sell real estate free and clear of liens.
II. Appointment of a Receiver
Last month, the United States Court of Appeals for the Third Circuit issued an important, 28-page opinion that confirmed a jury verdict, holding former officers and directors of a not-for-profit health care provider in bankruptcy, jointly and severally liable to the facility’s creditors – in the amount of $2.25 million – for breach of fiduciary duty in failing to properly oversee and manage the non-profit entity. Official Comm. of Unsecured Creditors ex rel. Lemington Home for Aged v. Baldwin (In re Lemington Home for Aged), No.
“An attorney’s reluctance, or that of his assistant, to work after 6:30 p.m. one evening in order to meet a court-imposed filing deadline does not constitute excusable neglect.”
– In re An
In a striking decision earlier this year, the 3rd Circuit Court of Appeals affirmed a jury’s findings of liability for breach of fiduciary duties and ‘deepening insolvency,’ and the award of $2.25 million in compensatory damages, jointly and severally, against former directors and officers of The Lemington Home for the Aged, a Pennsylvania not-for-profit that is in Chapter 11 bankruptcy.
The Supreme Court of the United States declined[1] to review the decision of the United States Court of Appeals for the Fourth Circuit in Jaffé v.
In re Baber, 523 B.R. 156 (Bankr. E.D. Ark. 2014) –
The debtors objected to a proof of claim filed on behalf of a mortgagee based on issues arising from assignment of the mortgage note by the lender that originated the loan. The mortgagee responded by, among other things, challenging the standing of the debtors to raise these issues.
On March 3, the DOJ’s U.S. Trustee Program announced a $50 million settlement with a national bank to resolve allegations that the bank engaged in improper actions during bankruptcy proceedings.