Recently, the US Bankruptcy Court for the District of Delaware denied the request of Washington Mutual and WMI Investment Corp. (collectively the Debtors) for confirmation of the Modified Sixth Amended Joint Plain of Affiliated Debtors. Among a number of issues, the Bankruptcy Court determined that the valuation of a captive reinsurance subsidiary (WM Mortgage Reinsurance Company – currently in run-off), which would serve as the most valuable asset of the proposed reorganized debtor was flawed.
A recent decision of the Delaware bankruptcy court serves as a reminder of a key risk for lenders who finance leveraged transactions—namely, that a bankruptcy court may “collapse” the components of a leveraged transaction in order to avoid the lender’s liens and the debtor’s loan obligations as fraudulent transfers.
Patient care ombudsmen are sometimes appointed to monitor the care provided to patients of medical facilities that have filed for bankruptcy. Courts, however, weigh a number of factors in determining whether an ombudsman should be appointed, and whether the patients and the facility’s creditors would benefit from the appointment.
An article by the National Underwriter Company discusses a recent Moody’s report that asbestos claims are again on the rise after years of declining or flat claims.1 This has led several insurers to increase their asbestos reserves and Moody’s views this trend as a warning flag for the property and casualty insurance industry as a whole.
Bottom Line:
The United States Bankruptcy Court for the District of South Carolina in In re Barnwell County Hospital, No. 11-06207 (Bankr. D.S.C. Oct. 27, 2011) held that anad hoc community group of citizens formed for the purpose of attempting to keep the Barnwell County hospital open and operating in its current location (the “Community Group”) was not a party-in-interest in the hospital’s bankruptcy case and so lacked standing to challenge the debtor’s eligibility for relief under chapter 9 of the Bankruptcy Code.
Although no official claims process has been announced, on November 10 and 11, the Trustee and its counsel provided additional information to securities claimants of MF Global Inc. ("MFGI") on how the process will work. Additionally, the Trustee requested patience during the ongoing liquidation as it works towards developing the claims process and effectuating a bulk transfer of securities customers accounts.
Responding to a subpoena issued by the House Energy and Commerce Committee, the White House turned over 130 pages of internal communications on Solyndra to the House Energy and Commerce Committee November 11. In total, the administration has turned over 185,000 pages of documents, including 100,000 pages from the Department of Energy last week.
On November 11th, Reuters reported on the November 10 filing of bankruptcy court protection by Jefferson County, Alabama, the largest municipal bankruptcy in U.S. history. The county declared bankruptcy after failing to reach an agreement with its creditors on its $3.14 billion debt. Hearings are set for November 21 and December 15 to decide who maintains control of the sewer system and to determine eligibility for Chapter 9. Bankruptcy.
In a client advisory sent by our office a few months ago, we described a decision in the Madoff saga in which the District Court for the Southern District of New York (the Court) closed off a potential avenue of significant recovery for the Madoff Trustee (the Trustee) and the Ponzi scheme victims by denying the Trustee standing to pursue certain claims against feeder funds – firms that sent investors’ funds to Madof
On October 28, 2011, the United States Bankruptcy Court for the Eastern District of Virginia issued an opinion in the Chapter 15 case of Qimonda AG (“Qimonda”).1 The bankruptcy court held that the application of § 365(n) to executory licenses to U.S. patents was required to sufficiently protect the interests of U.S. patent licensees under Chapter 15 of the Bankruptcy Code and that the failure of German insolvency law to protect patent licensees was “manifestly contrary” to United States public policy.