A trustee has filed a motion requesting court approval of a bankruptcy plan that would require New England Compounding Pharmacy owners and executives to establish a $100-million settlement fund for the benefit of creditors and individuals allegedly harmed by a 2012 fungal meningitis outbreak linked to the company’s steroid injections. In re New Eng. Compounding Pharm., Inc., No. 12-19882 (Bankr. D. Mass., motion filed May 6, 2014).
A recent ruling in the Chapter 11 case of Free Lance-Star Publishing limited the credit bidding rights of a secured creditor. The ruling has called into question the ability of the holder of secured debt to utilize such debt to acquire companies on a going concern basis in bankruptcy cases, particularly in instances where the debt was acquired at a discount for such expr
In December 2013 I wrote about the Innovation Act, H.R. 3309, a bill focused on patent infringement litigation and other patent law reforms that passed the House of Representatives on a bipartisan basis.
The Seventh Circuit has reversed the district court’s decision in the Sentinel matter and ruled that the Bankruptcy Court’s allowance of a pre-petition transfer and authorization of a post-petition transfer of assets by Sentinel to its FCM customers was permitted under the Bankruptcy Code. The District Court had previously avoided the $22.5 million pre-petition transfer of funds to FCM customers and the $297 million post-petition transfer of funds authorized by the Bankruptcy Court.
A brewing hot topic in bankruptcy law is how a Debtor deals with property that is collateral for a secured creditor which is surrendered but has not yet been legally foreclosed or repossessed by the creditor. The Debtor’s interest is obvious: to avoid accruing post petition obligations, such as taxes, insurance, and homeowner’s association dues.
In a ruling yesterday, Judge Christopher Sontchi of the United State Bankruptcy Court for the District of Delaware denied a motion by a bond trustee to transfer venue of the Dallas-based Energy Future Holdings from Wilmington, Delaware to the Northern District of Texas, citing broad support from many creditors for keeping the case before the Delaware court.
Three months ago, the U.S. District Court in Delaware upheld the bankruptcy court’s decision in In re Fisker Auto. Holdings, Inc., which limited, for “cause,” the amount that the purchaser of a secured lender’s claim could credit bid in connection with an asset sale under section 363 of the Bankruptcy Code.
Finds Bankruptcy Court to be Proper Forum for Claim Objection Despite Forum Selection Clauses in Investor Agreements
The Southern District of New York recently reiterated the critical difference between creditor claims and equity interests in the bankruptcy context. In a recent opinion arising out of the Arcapita Bank bankruptcy case, the Court was faced with an objection to a proof of claim filed by an investor, Captain Hani Alsohaibi, who characterized his right to recovery against the debtors as being based on a “corporate investment.”
In 2012, the Fifth Circuit ruled in In re Chilton that inherited IRAs constituted retirement funds within the “plain meaning” of §522 of the Bankruptcy Code and were thus exempt from the bankruptcy estate, under § 522(d)(12) (the federal exemptions). See our prior discussion of this case here.
After Chilton, many thought the issue was settled.
Before the Supreme Court this term is the question of whether a beneficiary individual retirement account (an “Inherited IRA”) is exempt from a debtor’s bankruptcy estate under 11 U.S.C. § 522(b)(3)(C) and (d)(12)2 of the Bankruptcy Code. The issue turns on 1) whether the funds in an Inherited IRA are “retirement funds,” and 2) whether an Inherited IRA is considered tax exempt under the Internal Revenue Code (the “Tax Code”).