Both the Loan Syndications and Trading Association, Inc. (the “LSTA”) and the Loan Market Association (the “LMA”) publish the forms of documentation used by sophisticated financial entities involved in the trading of large corporate syndicated loans in the secondary trading market. The LSTA based in New York was founded in 1995. The LMA based in London was formed in 1996. Both the LSTA and LMA share the common aim of assisting in developing best practices and standard documentation to facilitate the growth and liquidity of efficient trading of syndicated corporate loans.
The inclusion of pre-bankruptcy waivers in “standard issue” credit documents has generated a host of litigation in bankruptcy cases about the enforceability of such provisions.
The United States Supreme Court recently denied certiorari to an Eleventh Circuit appeal which would have addressed the issue of whether section 506(d) of the Bankruptcy Code permits a chapter 7 debt to “strip off”1 a wholly unsecured junior lien in Bank of America, N.A. v. Sinkfield.2 As a result, wholly unsecured junior creditors will continue to suffer the harsh consequence of having its junior lien completely “stripped off” in Eleventh Circuit bankruptcy cases, despite other Circuits around the country holding to the contrary.
In addition to their full-time jobs, many individuals have their own “side businesses” which generate some income but not enough to enable them to give up their “day job.” Many of these side businesses require assets in order for the individual to deliver the goods or services to his customers. When that individual has to file for bankruptcy, may he or she claim a “tools of the trade” exemption in the assets used in the side business? The Tenth Circuit Bankruptcy Appellate Panel in held a debtor may assert such an exemption in appropriate circumstances, in its decision in&
Although Section 506(b) of the Bankruptcy Code explicitly allows payment of post-petition interest to holders of oversecured claims (i.e., where the value of the collateral exceeds the amount of the claim), the Bankruptcy Code does not describe how to calculate it. No bright line rules exist dictating how to determine oversecured status, the timing of the valuation, and the rate and type of interest to be paid to oversecured creditors. Computation of post-petition interest is a frequent topic of debate among the courts.
District Court decides that in a broker-dealer liquidation governed by SIPA, where a trustee seeks to recover funds paid to the defendant under Sections 548(a) and 550(a) of the Bankruptcy Code, which impose liability for fraudulent conveyances where the defendant lacked good faith in receiving the funds: (i) the defendant’s good faith is evaluated under a subjective willful blindness standard, and (ii) to survive a motion to dismiss, the trustee bringing the fraudulent conveyance claims must plead facts sufficient to establish the defendant’s lack of good faith.
On April 29, 2014, power giant Energy Future Holding Corp. (“Energy Future”), along with 70 subsidiaries, filed for chapter 11 protection in the District of Delaware as part of a deal it has reached through lengthy negotiations with some of its largest senior creditors to restructure roughly $50 billion in debt.
Recently, a chink to the armor of distressed debt purchasers resonated throughout the secondary market with the decision of the Delaware Bankruptcy Court in In re Fisker Automotive Holdings, in which the bankruptcy court limited the right to credit bid of
In In re Mississippi Valley Livestock, Inc., No. 13-1377 (7th Cir. Mar.
The House Judiciary Subcommittee on Regulatory Reform, Commercial, and Antitrust Law recently held hearings regarding certain provisions of the Bankruptcy Code, including the safe harbor from preference and fraudulent conveyance claims for “settlement payments.”