The Bankruptcy Court’s conversion of Section 11 of the Illinois Conveyance Act from a safe harbor provision to a mandatory checklist that must be satisfied to survive avoidance challenges has been reversed (Crane Bankruptcy – D Ct decision). The Central District of Illinois holds compliance with the statute is permissive. While the statute provides that mortgages containing the enumerated terms, including the interest rate and matu
Oregon’s $29 million corporate excise tax claim against the taxpayers’ parent company was held to violate both the Due Process and Commerce Clauses of the U.S. Constitution by the U.S. Bankruptcy Court for the District of Delaware. Oregon claimed that Washington Mutual, Inc. (WMI) was liable for its subsidiaries’ tax because WMI had (as the parent corporation) filed consolidated corporate tax returns on behalf of itself and its subsidiaries and therefore could be held jointly and severally liable for the tax due.
The bankruptcy of the largest U.S. city to file a chapter 9 bankruptcy petition has yielded a decision with serious implications for municipal creditors. Specifically, the United States Bankruptcy Court for the Eastern District of California overruled the objections asserted by retired employees of the City of Stockton, California and authorized the City to suspend the retiree’s health benefits during the City’s Chapter 9 case. Ass’n of Retired Employees of the City of Stockton, et al. v. City of Stockton, California (In re City of Stockton), 56 Bankr.Ct.Dec. 250 (Bankr. E.D.
On February 26, 2013, the Fifth Circuit Court of Appeals issued an opinion in Western Real Estate Equities, L.L.C. v. Village at Camp Bowie I, L.P.1 (“Camp Bowie”). The bankruptcy court confirmed a debtor’s plan of reorganization over the objection of the secured creditor that argued the impaired accepting class of the cramdown plan was “artificially” impaired and that the plan was not proposed in good faith.
Overview
In Carroll v. Farooqi, 2013 U.S. Dist. LEXIS 22329 (N.D. Tex. Feb. 19, 2013), the United States District Court for the Northern District of Texas affirmed a U.S. Bankruptcy Court’s holding that an individual had standing to pursue an action against a franchisor under the Texas Deceptive Trade Practices Act (DTPA). The case involved an unsuccessful sale of a Salad Bowl franchise. The CEO of the fast causal franchise company (who was also its president, chairman, and CFO) contacted a potential buyer of a franchise.
Due to the substantial time and effort involved in negotiating and confirming a Chapter 11 reorganization plan, and the potential for improperly solicited votes to be disqualified, plan proponents generally are well advised to adhere strictly to the plan voting and disclosure requirements of the Bankruptcy Code. A recent Delaware bankruptcy court decision, In re Indianapolis Downs, LLC,1 indicates that creditors who actively negotiate the terms of a debtor's reorganization can, under certain circumstances, enter into a formal plan support agreement with the debtor
The Senate Judiciary Committee in February approved Delaware Democratic Senator Chris Coons to head the Subcommittee on Bankruptcy and the Courts for the 113th Congress. This gives Coons oversight of the nation’s bankruptcy court system, as well as court administration and management, judicial rules and procedures, the creation of new courts and judgeships, and legal reform and liability issues.
A Massachusetts bankruptcy court denied the motion for summary judgment of reinsurers Trenwick America Reinsurance Corporation and Unum Life Insurance Company, which sought to determine that debtor Malcom C. Swasey’s debt owed them was nondischargeable in bankruptcy. The underlying dispute centered on the reinsurers’ claim that Swasey and companies he controlled, IRC, Inc. and IRC Re, engaged in fraud and breached a contract under which IRC Re was to provide retrocessional coverage in connection with a workers’ compensation program.
The U.S. Court of Appeals for the Fifth Circuit held on Feb. 28, 2013, that a secured lender’s full credit bid for a Chapter 11 debtor’s assets at a bankruptcy court sale barred any later recovery from the debtor’s guarantors. In re Spillman Development Group, Ltd., ___ F.3d ___, 2013WL 757648 (5th Cir. 2/28/13). A “credit bid” allows a creditor to “offset its [undisputed] claim against the purchase price,” a right explicitly granted by Bankruptcy Code (“Code”) § 363(k). 3 Collier, Bankruptcy, ¶ 363.06[10], at 363-59 (16th rev. ed. 2010).