The chapter 9 bankruptcy case of the City of Detroit has been as complex and litigious as anticipated. Nevertheless, Emergency Manager Kevyn Orr has kept plodding forward, and last week filed a proposed plan of adjustment, the road map for the Motor City to emerge from bankruptc
A recent decision in the bankruptcy case of Fisker Automotive Holdings, Inc., et al. has called into question a long-held belief that secured creditors hold dear: that debt purchased at a discount can nonetheless be credit bid at its full face amount at a collateral sale. While it remains to be seen how other courts will interpret Fisker, this decision has the potential to restrict participation in Bankruptcy Code section 363 sales and dampen liquidity in the robust secondary markets.
Recently, two courts of appeal dismissed as moot under 11 U.S.C. § 363(m) appeals of orders authorizing the sale of assets. The courts’ analysis focused on whether granting the appellant’s relief from the lower courts’ order would affect the asset sale. Thus the trend in the appellate courts is that only appeals that will not affect the sale itself (such as a dispute over the distribution of sale proceeds) are not subject to being dismissed as moot.
In Obsidian Finance Group, LLC v. Cox, Nos. 12-35238, 12-35319 (9th Cir. Jan. 17, 2014), the Ninth Circuit held that First Amendment protections under the Supreme Court’s landmark opinion in Gertz v. Robert Welch, Inc., 418 U.S.
The Delaware State Legislature recently amended Article IV, section 11 of the Delaware Constitution to add United States Bankruptcy Courts to the expanding list of courts and agencies that may certify questions to the Delaware Supreme Court. The list already included other Delaware courts, the United States Supreme Court, a Court of Appeals of the United States, a United States District Court, the United States Securities and Exchange Commission, or the highest appellate court of any other state. See Del. Const. art. IV, § 11(8).
The opinion by the Delaware bankruptcy court in In re Fisker Auto. Holdings, Inc., raised alarm bells for secured creditors throughout the country. Many worry that it will diminish the valuable right of secured creditors to credit bid, which is the right to bid up to the amount of a secured claim without paying cash.
In Jaffé v. Samsung Electronics Co. (In re Qimonda AG), 737 F.3d 14 (4th Cir. 2013) (No. 12-1802), the Fourth Circuit affirmed a bankruptcy court’s ruling protecting licensees’ rights in connection with the recognition of a German insolvency proceeding. In Jaffe, the foreign debtor’s administrator petitioned the U.S. bankruptcy court for powers under Chapter 15 of the U.S.
The OCC has issued guidance to clarify supervisory expectations for national banks and federal savings associations in situations where secured consumer debt is discharged under Chapter 7 bankruptcy proceedings. The guidance issued on February 14 in OCC Bulletin 2014-4 describes the analysis necessary to “clearly demonstrate and document that repayment is likely to occur” to avoid the charge-off that would otherwise be required by the OCC’s Uniform Retail Credit Classification and Account Management Policy.
The case of Simon v. FIA Card, Services, N.A., recently decided by the Third Circuit, demonstrates the potential for conflicts between the Bankruptcy Code and the Fair Debt Collection Practices Act (“FDCPA”) and emphasizes that banks should approach bankruptcy debtors with caution.
The Court of Appeals for the Sixth Circuit held that no exception exists to Tennessee’s general prohibition on direct actions against an insurer, even in cases where the insured has declared bankruptcy triggering an automatic stay before a judgment in the underlying action. Mauriello v. Great American E&S Insurance Co., 2014 WL 321921 (6th Cir. Jan. 30, 2014). In so holding, the Sixth Circuit reasoned that an adequate remedy remains notwithstanding the automatic stay for a claimant to obtain a judgment against a bankrupt insured.