The fundamentals of corporate action can seem about as interesting as flossing. Yet, the failure to attend to either is likely to result in unpleasant consequences as one lawyer recently discovered in Winterton v. Humitech of No. Cal., LLC, 2011 Bankr. LEXIS 4164 (9th Cir. BAP 2011).
The Sixth Circuit is one of only five federal appellate courts to institute a bankruptcy appellate panel under 28 U.S.C. § 158(b). (The others are the First, Eighth, Ninth, and Tenth circuits.) As the bankruptcy appellate panel is unfamiliar to many non-bankruptcy attorneys, this post will review the Sixth Circuit’s bankruptcy appellate panel.
On November 22, 2011, the Court of Appeals for the Eleventh Circuit issued a per curiam opinion that piqued the interest of bankruptcy practitioners nationwide and sent secured creditors scrambling to ensure that their rights to a deficiency claim had been properly preserved in pending bankruptcy cases. The Eleventh Circuit held that the IRS had waived its right to an unsecured deficiency by filing a proof of claim that evidenced a secured claim but failed to note that a portion of the claim may be unsecured.
The Bankruptcy Court for the District of Massachusetts recently issued an opinion in In re SW Boston Hotel Venture, LLC1 in which it found, among other things, that the assignment of voting rights from a junior creditor to a senior creditor pursuant to an intercreditor agreement was unenforceable. The opinion was rendered in connection with the court’s decision to confirm the plan proposed by the debtor, the owner of the W Hotel in Boston.
Background
The Court of Appeal in England has unanimously upheld a first instance decision that a Financial Support Direction (FSD) issued by the Pensions Regulator to an entity after it has commenced insolvency proceedings will rank as an expense of the administration, therefore affording it superpriority over floating charge holders and other unsecured creditors. This decision has significant implications for lenders to groups with UK defined benefit pension plans if any of their security is taken as a floating charge.
In a case of first impression that has important implications for parties who acquire intellectual property rights under international license agreements, the U.S. Bankruptcy Court for the Eastern District of Virginia held that the protections of Section 365(n) of the U.S. Bankruptcy Code applied to licensees of U.S. patents in a Chapter 15 case, despite the fact that those protection were not available under the foreign law applicable to the foreign debtor. In re Qimonda AG, Case No. 09-14766 (Bankr. E.D. Va., Oct. 28, 2011) (Mitchell, Bankruptcy J.).
Irving Picard's lawsuit against JPMorgan Chase & Co. styled Picard v. JPMorgan Chase & Co., 11-cv-913, in the U.S. District Court, Southern District of New York, was dismissed on November 1, 2011. U.S.
Earlier today AMR Corporation, its subsidiary American Airlines, Inc., and 18 other affiliates ("Debtors") filed petitions under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York in Manhattan.1 The case was assigned to Bankruptcy Judge Sean H. Lane. The Debtors have asked the Court to consolidate all 20 cases for procedural purposes under the captionIn re: AMR Corporation, Case No. 11-15463.
The case of In re Dickson, 655 F.3d 585 (6th Cir. 2011) centered on the status of the debtor’s manufactured home under Kentucky law. In Kentucky, a manufactured home is considered personal property. As such, in order for a lien to be effective, it must be noted on the certificate of title. A manufactured home may be converted to real property, however, if the owner files an affidavit that states it is permanently affixed to real estate and then surrenders title.
On November 17, 2011 the IRS issued final Treasury Regulations (the “Final Regulations”) that address the tax consequences of a debtor partnership’s issuance of equity in satisfaction of a debt obligation (a “Partnership Equity-for-Debt Exchange”). The Final Regulations provide debtor partnerships, their partners and creditors with welcome clarity regarding the federal income tax consequences of such restructuring.