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.
Sometime this summer, the Supreme Court is expected to issue its ruling in U.S. v. Quality Stores. In this case, the Supreme Court reviewed the Sixth Circuit’s holding that supplemental unemployment compensation benefits (“SUB payments”) relating to severance payments are not subject to FICA taxes. U.S. v. Quality Stores, 693 F.3d 605 (6th Cir. 2012). The Sixth Circuit decision resurrects a long-disputed issue regarding the applicability of FICA to severance pay.
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
The Sixth Circuit in its recent opinion in Grant, Konvalinka & Harrison, P.C. v. Still (In re McKenzie), 737 F.3d 1034 (6th Cir.
On January 17, 2014, the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) entered an order in the Fisker Automotive (“Fisker”) chapter 11 bankruptcy cases limiting the ability of Fisker’s secured lender, Hybrid Tech Holdings, LLC (“Hybrid”), to credit bid at an auction for the sale of substantially all of Fisker’s assets.1 Hybrid immediately sought an appeal of the Bankruptcy Court’s
Heralded by debtor’s attorneys as “a wonderful loophole”1 in the Bankruptcy Code, a debtor who has primarily business, rather than consumer, debts can qualify for a speedy Chapter 7 discharge despite a high earning capacity that would permit the debtor to repay some, or even all, of her debt. Though rarely used, banks faced with a high-income debtor’s Chapter 7 case can move to convert the case to Chapter 11 under 11 U.S.C. §706(b) to force the debtor to repay some of her debt prior to receiving a discharge.
When structuring a complex debt financing, financiers need to consider whether unsecured and structurally subordinated “mezzanine” debt ought to be replaced in the capital hierarchy with secured second lien credit. The relatively lower financing cost for second lien credit is based on the assumption that the second lien lenders might obtain some equity value from the liens on the residual collateral which would not otherwise be available with such “mezzanine” debt.