Sprint Nextel Corporation v. U.S. Bank N.A. (In re TerreStar Networks, Inc.), Case No. 10-15446 (Bankr. S.D.N.Y., Aug. 19, 2011)
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Leading the Past Week
Due to the economic crisis of the past few years, many large and medium-sized businesses were forced to file for bankruptcy protection. Now, many businesses are faced with letters from bankruptcy trustees, or worse, a summons where the trustee is seeking liability for a “preference.” Faced with these demands, many businesses are failing to defend themselves, and incurring unnecessary liability. But acting quickly can help protect you and your business and settle preference claims short of expensive litigation.
Recent trade publications have prophesized a wave of shipping bankruptcies. We have already seen several in the United States in 2011, such as Omega and Marco Polo. Trailer Bridge and General Maritime fi led in November. There will undoubtedly be more, despite the potential debtors having little or no connection to the United States. In this respect, non-U.S. listed shipowning companies considering restructuring and reorganization may not factor in the potential for a U.S. main proceeding under Chapter 11 reorganization on the assumption that they do not qualify to be U.S. debtors.
In the course of the next few weeks, Omega Navigation Enterprises, Inc. and its affiliates (collectively, “Omega”), an international shipping enterprise, will find out if motions by certain of their lenders to, among other things, dismiss Omega’s chapter 11 bankruptcy proceedings have been granted by the U.S. Bankruptcy Court for the Southern District of Texas.1 If not, then Omega may be permitted to continue its attempt to reorganize its business under chapter 11 of the Bankruptcy Code.
The District Court in Manhattan seems to have put the nail in the coffin of triangular set-off in insolvency – that is, the ability of affiliates to set off their claims against an insolvent debtor: In re Lehman Brothers Inc. (SDNY, 4 October 2011).
The United States Bankruptcy Court for the Southern District of New York issued a memorandum decision in the Lehman Brothers Inc. (LBI) liquidation proceeding confirming the LBI trustee’s determination that certain claims relating to TBA contracts do not qualify as customer claims against LBI’s estate.
On Friday, November 25, 2011, the Federal Deposit Insurance Corporation (the “FDIC”) and the Department of the Treasury (“Treasury”) issued joint proposed rules to implement the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Act”) described below. Comments must be received by January 24, 2012.
Lehman Brothers Holdings, Inc. v. Bethany Holdings Group, LLC, et al., 2011 WL 3427013, (S.D.N.Y. Aug. 5, 2011)
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Sandburg Financial Corp. v. American Rice, Inc. (In the Matter of American Rice, Inc.), No. 11-40301 (5th Cir., Sept. 22, 2011)
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