On April 11, 2014, the United States Court of Appeals for the First Circuit rendered an important decision regarding the long-running bankruptcy case of SW Boston Hotel Venture LLC (“SW”), the developer of the W Boston Hotel. This Advisory focuses on two key rulings made by the First Circuit: (i) when an oversecured creditor’s claim for post-petition interest in a debtor’s chapter 11 case begins to accrue and (ii) how such post-petition interest should be calculated in the instances where it is due.
New value is an important defense to preference liability under the Bankruptcy Code. It allows a preference defendant to relieve their preference liability on a dollar-for-dollar basis for the value provided to the debtor prior to the bankruptcy case.
In a very important decision, the Eighth Circuit recently addressed how the new value defense to preference liability should be applied in three-party payment arrangement.
When Reston-based Simplexity, LLC (known more commonly as Wirefly.com and its related sites) recently filed for chapter 11 bankruptcy it had, sadly, already terminated nearly its entire workforce. According to pleadings filed in the case, Simplexity had hoped to market and sell its assets outside of bankruptcy in order to maximize creditor recovery and preserve the jobs of its employees. Instead, its liquidity reached such a critical level that it was forced to cease operations on March 12 and file for bankruptcy protection on March 16, 2014. Just one day later, on M
A recent appellate decision in the Western District of Washington prohibited hedge fund creditors from voting on a debtor’s chapter 11 plan on the basis that the funds did not qualify as “financial institutions” for purposes of the definition of “Eligible Assignee” under the applicable loan agreement.1 While this counter-intuitive result seems driven by the specific facts of that case, this decision serves as a useful reminder of the importance of carefully reviewing assignment restrictions when purchasing loans in the secondary market.
A federal district court has ruled that a distressed debt fund is not a “financial institution” for purposes of the assignment provisions of a loan agreement.
Background
The Bottom Line:
Overview
Mt. Gox filed a motion requesting the U.S. Bankruptcy Court’s approval of the form of the official notification of the May 6 recognition hearing as well as approving the service via email. The motion also seeks to establish a deadline of seven days before that hearing for any party to object to the request for recognition of the Japanese insolvency case. Additional notice would be provided by posting an approved form of notification on the Mt. Gox web site as well as at the Reddit.com site.
Generally, as a result of judicial and legislative reforms, plaintiffs’ lawyers have moved away from mass screenings and filing of claims on behalf of unimpaired or non-malignancy plaintiffs in asbestos litigation. Rather, many of these unimpaired cases are being moved through the less rigorously reviewed channels of asbestos bankruptcy trusts that provide relatively little oversight and have more than $36.8 billion in assets available.