Four decades ago, when I began my legal career, bankruptcy sales were held in low regard. They were regarded, and often referred to, as “fire sales” that were almost certain to attract no interested parties other than bottom feeding liquidators seeking to pay only a fraction of the value of the marketed assets. For this reason, potential sellers steered clear of bankruptcy.
Once might be considered an aberration. Is twice the new normal?
The District Court for the Southern District of New York in Lehman Brothers recently threw cold water on a growing body of cases that permit compensation of professional fees incurred by individual members of official committees of unsecured creditors.
In the recent case of Davis v. Elliot Mgmt. Corp. (In re Lehman Bros. Holdings Inc.), 2014 U.S. Dist. LEXIS 48102 (S.D.N.Y. Mar. 31, 2014), the District Court for the Southern District of New York issued a decision barring reorganization plans from paying legal fees of individual members of official creditors’ committees absent a showing of substantial contribution to the estate.
A recent opinion out of the United States Bankruptcy Court for the Eastern District of Virginia (Richmond Division) serves as a reminder to secured creditors to steer clear of conduct that a bankruptcy court may deem inequitable and provide the court with cause to limit the secured creditor’s credit bid rights. In In re The Free Lance-Star Publishing Co.
A federal district court has ruled that a distressed debt fund is not a “financial institution” for purposes of the assignment provisions of a loan agreement.
Background
The Bottom Line:
Assignees of Loan Only Entitled to One Collective Vote on Plan
The Tenth Circuit Court of Appeals recently considered the question of how much protection is required for a secured creditor to be adequately protected. Banker’s Bank of Kansas, N.A. v. Bluejay Properties, LLC (In re Bluejay Properties, LLC), Bankr. No. 12-22680 (10th Cir. Mar. 12, 2014)(unpublished).
On April 11, 2014, the United States Court of Appeals for the First Circuit rendered an important decision regarding the long-running bankruptcy case of SW Boston Hotel Venture LLC (“SW”), the developer of the W Boston Hotel. This Advisory focuses on two key rulings made by the First Circuit: (i) when an oversecured creditor’s claim for post-petition interest in a debtor’s chapter 11 case begins to accrue and (ii) how such post-petition interest should be calculated in the instances where it is due.