When Fisker filed bankruptcy in November, it planned to sell its assets to Hybrid Tech, the acquirer of Fisker’s $168.5 million loan from the Department of Energy, by way of credit bid.  Before the sale (requiring the approval of the Bankruptcy Court) was consummated, another potential acquirer, Wanxiang Group Corp.,  emerged.  Wanxiang originally offered $27.5 million in cash and subsequently increased its offer.

In a departure from other bankruptcy courts in the Third Circuit and her own recent prior opinion, U.S. Bankruptcy Chief Judge Mary France of the Middle District of Pennsylvania broadly interpreted the U.S. Supreme Court’s ruling in Stern v. Marshall, 564 U.S. 2 (2011), and held that a bankruptcy court lacks the constitutional authority to issue a final judgment in any fraudulent transfer action where the defendant (i) has not filed a proof of claim and (ii) has not consented to the bankruptcy judge entering a final judgment on the matter. 

On January 10, 2014, a Bankruptcy Court Judge issued a strongly-worded, 65-page opinion that exposes a “startling pattern of misrepresentation” by some plaintiffs’ attorneys in asbestos litigation.  He concluded that the “withholding of exposure evidence by plaintiffs and their lawyers was significant and had the effect of unfairly inflating” recoveries.   In re GarlockSealing Techs., No. 10-31607, at 35, 37 (Jan. 10, 2014, Bankr. W.D.N.C.). 

Joe Francis built his Girls Gone Wild (GGW) empire (and the ego of an emperor) filming intoxicated college girls in various states of undress, putting that footage on VHS (and later DVDs and branded websites), and selling them to eager consumers across the globe.  If you were alive and watching TV in the late 1990s and early aughts, those late-night infomercials undoubtedly made their way across your TV screen at some point, or you may have even purchased such classics as Girls Gone Wild: Mardi Gras Madness or Girls Gone Wild: Ultimate Spring Break.

In a case of first impression at the circuit level, the Tenth Circuit Court of Appeals has held a debtor’s entire religious tithing is avoidable if it exceeds 15% of the debtor’s gross annual income, and the court did so based on its perception of the plain language of the Religious Liberty and Charitable Donation Protection Act which codified the “safe harbor” provisions of sec.

On January 10, 2014, in a closely watched case, Judge George Hodges of the Bankruptcy Court for the Western District of North Carolina ruled that Garlock Sealing Technologies, Inc.

In In re Louisiana Riverboat Gaming P’ship (Global Gaming Legends, LLC v. Legends Gaming of Louisana-1, LLC) (“Global Gaming”), the United States Bankruptcy Court for the Western District of Louisiana stayed discovery in an adversary proceeding pending decision on a party’s motion to withdraw the reference to the district court, finding too much risk that the bankruptcy court would later be found to be without authority to handle pre-trial discovery for the “Stern-governed” core claims at issue. Adv. Proc. No. 13AP-1007 (Bankr. W.D. La. Jan. 10, 2014).

Since the financial crisis, sales under Section 363 of the Bankruptcy Code have provided an increasingly popular way for secured creditors of distressed businesses to recover their loans.  However, despite the advantages of Section 363 sales, the significant expense and time required to conduct a Bankruptcy sale has caused secured creditors to pursue less comprehensive solutions.  One alternative for recouping value from a troubled loan is an Article 9 foreclosure sale under the Uniform Commercial Code (UCC).

As Delaware has often been selected as a preferred place of incorporation by U.S. businesses, and consequently the venue for dissolution and bankruptcies, the recent decision by the Delaware Supreme Court, In the Matter of Krafft-Murphy Co., Inc., No. 85, 2013 (Del. Nov. 26, 2013), holding that insurance contracts remained property of the dissolved corporation may have significant implications for “orphan shares” at co-disposal, environmental remediation sites, as well as for non-environmental liabilities.

Recently, the United States Court of Appeals for the Seventh Circuit held that Illinois mortgages entered prior to the amendment of 765 ILCS 5/11 need not strictly conform to the form presented in the statute. In re Crane, --- F.3d ---, 2013 WL 6731850 (7th Cir. Dec. 23, 2013). However, the court’s decision in Crane, considered as a whole, serves as a reminder to secured lenders to closely examine the contents of their mortgages and the requirements of applicable state law.