The Bankruptcy Court held a status conference in the Harrisburg Chapter 9 earlier today. The principal purpose of the hearing was for the court to set a schedule for objections to Harrisburg’s chapter 9 eligibility. Objections to eligibility and supporting briefs are to be filed by October 28, a response by the City Council is to be filed by November 7, and replies on behalf of the objecting parties are to be filed by November 12. The judge made it clear that the City Council has the burden of showing eligibility. Th
In a victory for secured creditors, the Seventh Circuit Court of Appeals recently held inRiver Road Hotel Partners, LLC v. Amalgamated Bank (In re River Road Hotel Partners, LLC), 2011 WL 2547615 (7th Cir. June 28, 2011), that a dissenting class of secured lenders cannot be deprived of the right to credit-bid its claims under a chapter 11 plan that proposes an auction sale of the lenders’ collateral free and clear of liens.
A significant consideration in a prospective chapter 11 debtor’s strategic prebankruptcy planning is the most favorable venue for the bankruptcy filing.
In the recent case of Whittle Development, Inc. v. Branch Banking & Trust Co. (In re Whittle Development, Inc.), No. 10-37084, 2011 WL 3268398 (N.D. Tex. July 27, 2011), a bankruptcy court was asked whether a preference action could be sustained against a creditor who purchased real property in a properly conducted state law foreclosure sale. Recognizing a split of authority and some contrary principles enunciated by the Supreme Court in its prior decision, BFP v. Resolution Trust Corp., 511 U.S. 531 (1994), the bankruptcy court found that a preference claim could be asserted.
The City of Harrisburg, Pennsylvania—the state's capital—filed for bankruptcy under Chapter 9 of the United States Bankruptcy Code on Wednesday October 12, 2011, indicating that it owed fewer than 50 creditors more than $545 million.
On June 23, 2011, the Supreme Court of the United States issued the decision of Stern v. Marshall, debatably the most important case on bankruptcy court jurisdiction in the last 30 years. The 5-4 decision, written by Chief Justice Roberts, established limits on the power of bankruptcy courts to enter final judgments on certain state law created causes of action.
Introduction
The United States Bankruptcy Court for the Southern District of New York (the Court), has held that section 553(a) of the Bankruptcy Code prohibits a swap counterparty from setting off amounts owed to the debtor against amounts owed by the debtor to affiliates of the counterparty, notwithstanding the safe harbor provision in section 561 of the Bankruptcy Code and language in the ISDA Master Agreement permitting the swap counterparty to effect “triangular” setoffs. In re Lehman Brothers Inc., Case No. 08-01420 (JMP)(SIPA) (Bankr. S.D.N.Y. October 4, 2011).
On October 4, 2011, the United States Bankruptcy Court for the Southern District of New York ruled that a contractual right of a triangular (non-mutual) setoff was unenforceable in bankruptcy, even though the contract was safe harbored. In re Lehman Brothers, Inc., No. 08-01420 (JMP), 2011 WL 4553015 (Bankr. S.D.N.Y. Oct. 4, 2011).
On July 22, 2011, Bankruptcy Judge Craig A.