An indenture trustee learned a hard lesson last week when the U.S. Court of Appeals for the Third Circuit held that the description of a feature of its settlement with the debtor in a disclosure statement was inadequate and rendered a key element of the plan and the settlement unenforceable against third-party litigants. It is well established that adequate disclosure of a release provision contained in a reorganization plan is essential to its inclusion in the plan and its enforceability against third parties.
One of the most dramatic tools a lender can use in the collection of a loan is the involuntary bankruptcy case. It is dramatic because of the implications for both the debtor and the lender who files the case.
As most astute manufacturers know, there is a statutory right under Bankruptcy Code section 503(b)(9) to assert an administrative priority claim (one with the highest priority in payment after secured creditors) for goods delivered to a debtor within 20 days before the debtor commences a bankruptcy case. There are, however, other laws that should be considered when dealing with foreign commercial transactions as illustrated in a recent decision by the Bankruptcy Court in the Eastern District of Pennsylvania in the case of In re World Imports, Ltd. (No. 13-15929 SR).
In my last post I discussed the Meridian Sunrise Village v. NB Distressed Debt Investment Fund Ltd. opinion handed down by the United States District Court for the Western District of Washington in March of this year.
As has been widely publicized, the United States Supreme Court recently provided guidance on a bankruptcy court's jurisdiction to address certain types of claims, but left open issues of whether parties may consent to bankruptcy court jurisdiction (or waive a lack of jurisdiction argument if not raised early enough) to enter final judgments on certain types of matters. See Executive Benefits Agency v. Arkison (In re Bellingham Ins. Agency, Inc.), 573 U.S. ___ (June 9, 2014).
The United States Supreme Court, on July 1, 2014, granted a petition for certiorari in an important Seventh Circuit case limiting the power of bankruptcy courts to decide property disputes. Wellness International Network, Ltd. et al. v. Sharif, 727 F.3d 751 (7th Cir. 2013). The Seventh Circuit had held last year that the bankruptcy court lacked the constitutional authority to determine whether purported trust assets were property of the debtor’s estate.
The Eighth Circuit recently issued an opinion in the Interstate Bakeries Corporation bankruptcy case reversing its previous holding that a perpetual royalty-free trademark license constituted an executory contract that could be assumed or rejected in bankruptcy.1 The Eighth Circuit, in a r
The Supreme Court Gets Its Grammar on: Interpreting the Right to Postpetition Interest Under Section 506(b)
In this Throwback Thursday, piece we revisit the decision of the United States Supreme Court in U.S. v. Ron Pair Enters. In a 5-4 decision, the Supreme Court held that section 506(b) of the Bankruptcy Code permits a creditor to receive postpetition interest on an oversecured claim even if the creditor does not have the benefit of an agreement providing for interest on the claim.
The filing of a bankruptcy petition creates a bankruptcy estate that includes “all legal or equitable interests of the debtor in property as of the commencement of the case.” Highland Capital Mgmt. LP v. Chesapeake Energy Corp. (In re Seven Seas Petroleum, Inc.), 522 F.3d 575, 584 (5th Cir. 2008) (quoting 11 U.S.C. § 541(a)(1)). This includes “rights of action such as claims based on state or federal law.” Id.
In a recent decision welcomed by creditors, the United States District Court for the Eastern District of North Carolina reversed a bankruptcy court order confirming a Chapter 11 debtor’s plan because the debtor engaged in “obvious gerrymandering” in order to secure the votes necessary to obtain confirmation of the plan.
I. Facts