Two recent rulings have provided significant guidance on the determination of whether an entity is eligible to be a debtor under Chapter 9 of the Bankruptcy Code. On April 26, 2010, the Bankruptcy Court for the District of Nevada issued a decision denying a motion to dismiss the Chapter 11 case of Las Vegas Monorail Company (LVMC) filed by Ambac Assurance Corp. In re Las Vegas Monorail Company (Las Vegas Monorail).
The United States District Court for the District of Delaware recently affirmed a Bankruptcy Court decision that invalidated the use by creditors of so-called “triangular”, or non-mutual, setoffs in which obligations are offset among not only the parties to a bilateral contract but also their affiliates. In re SemCrude, L.P., 2010 U.S. Dist. LEXIS 42477 (D. Del.
Introduction
Product liability claimants who lost their right to recover from General Motors LLC (GM) when that company’s assets were sold in bankruptcy have reportedly filed a notice of their intent to file an appeal to the Second Circuit Court of Appeals.
The Eleventh Circuit recently affirmed the avoidance of nearly $2 million in postpetition payments made by debtor Delco Oil, Inc. (the "Debtor") to its petroleum supplier Marathon Petroleum Company, LLC ("Marathon").[1] The Eleventh Circuit held that funds received by Marathon from the Debtor constituted cash collateral that the Debtor had spent without the permission of either its secured lender, CapitalSource Finance ("CapitalSource"), or the bankruptcy court and, therefore, could be avoided under sections 549(a) and 363(c)(2) of the Bankruptcy Code.
A recent bankruptcy New York court decision1 highlights a less commonly used option for lenders to take control of troubled real estate projects. The lender obtained relief from the automatic stay to foreclose on membership interests pledged to secure its mezzanine loan instead of foreclosing on its mortgage against the underlying real property.
Here is the case, and what lenders can learn from it.
The Case
IN RE: SOUTH BEACH SECURITIES (May 19, 2010)
Many landlords are very familiar with provisions of the United States Bankruptcy Code dealing with assumption and rejection of leases. However, the particular consequences of lease rejection may not be as well known. For example, once a lease is rejected or deemed to be rejected, a landlord may not know its rights with respect to regaining possession of the leased premises. A recent case from a Florida bankruptcy court shed some light on this issue when it held that after a debtor has rejected a lease, the tenant must surrender the premises to the landlord.
Introduction
On May 31, 2010, Specialty Products Holding Corp ("SPHC" or the "Debtor"), filed for bankruptcy in the United States Bankruptcy Court for the District of Delaware. This post is one of two posts regarding the SPHC bankruptcy. The first post will look at the Debtor's businesses and events leading up to the bankruptcy filing, while a second post will look at how SPHC intends to deal with the large volume of asbestos claims that forced it to file for bankruptcy.