The United States Court of Appeals for the Eleventh Circuit (the “Eleventh Circuit”) has reinstated the controversial 2009 decision of the United States Bankruptcy Court for the Southern District of Florida (the “Bankruptcy Court”) that required a group of lenders to disgorge $421 million as fraudulent conveyances under sections 548 and 550 of the Bankruptcy Code.

A federal court recently held that two investment funds are not jointly and severally liable for a bankrupt portfolio company’s withdrawal liability to a multiemployer pension plan disagreeing with a 2007 opinion by the Appeals Board of the Pension Benefit Guaranty Corporation (the “PBGC”). The Massachusetts U.S. District Court ruled there was no liability because the investment funds are not “trades or businesses” for purposes of ERISA’s joint and several liability rules.

Last month the drama surrounding Hostess’s efforts to reject various collective bargaining agreements drew to a close (pending appeal).  Bankruptcy Judge Robert Drain (in an unpublished decision) authorized Hostess to reject its existing CBAs with affiliates of the Bakery, Confectionery, Tobacco and Grain Workers International Union, and modify the terms of its expired CBAs with the Bakers’ Union on an interim basis.  The Bakers Union was the last of Hostess’s major unions holding out and refusing to accept modifications to its CBAs.  See Transcript of Hearing, In re Hoste

The New Jersey Appellate Court has recently ruled that a receiver can be sued for injuries sustained in a building under the receiver’s control.  The case involved a dilapidated apartment building in Passaic and injuries sustained thirteen months after the receiver was appointed by judge overseeing the foreclosure case of the first mortgage holder.  The receiver was charged with responsibility to collect rent; manage, insure and repair the premises; pay taxes and assessments; and “do all things necessary for the due care and proper management of the mortgaged premises.”  Acco

The United States District Court for the Eastern District of Virginia, applying Texas law, has held that a settlement agreement resolving coverage litigation released the insurer’s obligation for defense costs for certain claims tendered for coverage under a subsequent policy.  Nat’l Heritage Found., Inc. v. Philadelphia Indem. Ins. Co., 2012 WL 5331570 (E.D. Va. Oct. 25, 2012).

On July 10, 2012, the United States Bankruptcy Court for the Western District of Kentucky ruled that the Council on Occupational Education, Inc., the accreditor for Decker College, Inc., made factually erroneous statements to DOE. In re Decker College, Inc., Case No. 05-61805 (W.D. Ky. July 10, 2012), Dkt. 198 at 18. Specifically, the Court found that the accreditor had falsely informed DOE that Decker College had not been accredited to offer distance education programs.

One of the most powerful tools a chapter 11 debtor has is the ability to assume or reject executory contracts under section 365 of the Bankruptcy Code.  In bankruptcy parlance, when a debtor “rejects” an executory contract, it is considered as though the debtor breached the agreement as of the date it filed for bankruptcy and sheds the debtor’s obligation to perform under the rejected contract.  The non-debtor party receives a claim for damages arising from the debtor’s breach; however, in many cases, it will be worth only pennies on the dollar.  The converse of rejection is

Under Section 436 of the Internal Revenue Code, a single employer defined benefit plan sponsored by a company in bankruptcy cannot pay any “prohibited payments” (e.g., lump sums, Social Security level income annuity payments) if the plan is less than 100% funded. In June 2012, the IRS issued proposed regulations permitting such a defined benefit plan to be amended to eliminate prohibited payment forms without violating the anti-cutback requirements of Internal Revenue Code Section 411(d)(6) if certain conditions are satisfied.

In a surprising decision certain to reinvigorate the ongoing debate about the scope of Stern v. Marshall, ___ U.S. ___, 131 S. Ct. 2594 (2011), the Sixth Circuit Court of Appeals adopted a broad view of Stern and held that the structural nature of the limitations imposed on bankruptcy courts by Article III of the Constitution could not be waived by a party’s failure to object at the trial court level. The decision, Waldman v. Stone, 2012 WL 5275241 (6th Cir. Oct.

Chief Judge Frank Easterbrook of the Seventh Circuit recently created a split of authority regarding the rejection intellectual property licenses in bankruptcy by upholding a decision protecting a trademark licensee’s ability to use a debtor licensor’s trademark after the licensing agreement had been rejected. Chicago American Manufacturing’s licensing contract with debtor Lakewood Engineering & Manufacturing authorized CAM to sell fans under Lakewood’s mark.