On July 13, 2010, a three-judge panel of the United States Court of Appeals for the Third Circuit unanimously held that auto-parts supplier Visteon Corporation could not terminate health and life insurance benefits for approximately 2,100 retirees during its chapter 11 bankruptcy unless Visteon followed the specific requirements laid out in section 1114 of the Bankruptcy Code, even if Visteon would have had the unilateral right to terminate these benefits outside bankruptcy.1 The Court found that a debtor may terminate any retiree benefits in bankruptcy only if,inter alia, the debt
Given the overarching Madoff Ponzi scheme as well as other mini-Madoff schemes that surfaced in its wake, many have been following issues arising from the ability of a trustee to claw back transfers (either as preferential or as fraudulent transfers) from investors who redeemed their interests in a private investment fund or managed account that turned out to be a Ponzi scheme. The law generally provides that an investor’s principal investment is protected so long as it is received in good faith and for value.
A company facing a rash of tort lawsuits may try to use a dormant subsidiary’s bankruptcy as a tool to limit its exposure. That’s what Pfizer tried to do, and a New York bankruptcy judge sent them packing. This case is a warning to corporate parents that courts will not allow them to manipulate the process to use the bankruptcies of subsidiaries to further their own agendas. If you’re a creditor you can use this case as ammunition in reorganization disputes to show bad faith. Read on for a quick summary of what happened in the Pfizer case, and what you can learn from it.
Once a company files a Chapter 11 bankruptcy petition (to sell its assets, reorganize or liquidate), Bankruptcy Code § 1114 sets forth a detailed procedure for the employer to follow to modify or terminate certain retiree benefits. Among other things, § 1114 imposes on the employer the burden of showing that the elimination or modification of benefits is necessary to permit reorganization.
The issue of whether Section 362(a) operates as a stay of ITC Section 337 investigations arose in several ITC cases in the last two years. The first case, ITC Investigation No. 337-TA-605, involved Spansion, Inc., a Delaware corporation that manufactures semiconductor chips outside the United States. Spansion was named as a Respondent in the case and contended that the ITC investigation should be stayed as to Spansion pursuant to the automatic stay provision of Section 362(a).
Recently, the Chapter 7 Trustee (the "Trustee") in the HRP Myrtle Beach Holdings bankruptcy, filed several avoidance actions pursuant to sections 547, 548, and 549 of the Bankruptcy Code. The avoidance actions, filed in the United States Bankruptcy Court for the District of Delaware, are before the Honorable Kevin J. Carey, Chief Judge of the Delaware Bankruptcy Court.
On September 20th, the United States District Court for the Southern District of New York granted BNY Corporate Trustee Services Limited ("BNY") leave to appeal the bankruptcy court's decision in the Lehman "Dante" matter. In its January decision, the bankruptcy court had voided certain document provisions providing for the subordination of a swap counterparty's rights to an early termination payment when the swap counterparty or one of its close affiliates went into bankruptcy. BNY holds the collateral subject to this dispute.
Introduction
Recently, there have been cases in several states presenting the issue whether funds in an “inherited IRA” are exempt assets.1 An Ohio Bankruptcy Court has now ruled in favor of granting exempt status.
Introduction