Can a United States bankruptcy court deny recognition of a foreign insolvency proceeding even if no one opposes such recognition? In a recent decision, Judge Burton Lifland, a highly respected bankruptcy judge and one of the authors of Chapter 15 of the Bankruptcy Code, says yes.
Liquidators of Bear Stearns Funds Seek Relief under Chapter 15
A company attempting to reorganize its affairs in bankruptcy may seek to enjoin its creditors or other third parties from suing members of the company's senior management team during the course of the reorganization proceedings, so that the senior management members can devote their time and resources to the reorganization effort without distraction. Courts throughout the country have applied differing standards in determining when the granting of an injunction of proceedings against a non-debtor is appropriate.
The nature of online commerce requires the collection of information from individuals to identify the parties to individual transactions, transfer funds for payment, and ensure the delivery of the goods or services being acquired. Public concern about the potential for abuse of such information by online merchants gave rise to the development of so-called "privacy policies" that provide a measure of reassurance that information collected will be protected from unauthorized use and disclosure.
District Judge James D. Zagel of the United States District Court for the Northern District of Illinois on Nov. 9, 2007, ordered a Chapter 11 debtor-in-possession ("DIP") to "immediately" pay its so-called "commitment" and "DIP Facility Funding" fees. ("Loan Fees"). Arlington LF, LLC, v. Arlington Hospitality, Inc., 2007 WL 3334499 (N.D. Ill. 11/9/07). Reversing the bankruptcy court, the district court held that the DIP was not excused from paying the fees despite the lender's earlier refusal to advance further funds on its $6 million revolving loan agreement ("Revolver"). Id. at 5.
In a recent decision1 in a claims objection proceeding in the Solutia chapter 11 case, the Bankruptcy Court for the Southern District of New York set clear limits on the allowance of secured claims.
The United States District Court for the District of New Jersey has abstained from hearing a dispute between a primary and an excess professional liability insurer related to a bankruptcy settlement based on the mandatory abstention doctrine. Royal Indemn. Co. v. Admiral Ins. Co., Inc., 2007 WL 4171649 (D.N.J. Nov. 19, 2007). After the insured corporation declared bankruptcy, the bankruptcy trustee settled claims with the insured's primary professional liability insurer.
January 8, 2008 A Delaware bankruptcy court decided on Friday that mortgage servicing rights could be severed from a mortgage loan repurchase agreement that fell within applicable safe harbors of the Bankruptcy Code, at least where the loans were transferred “servicing retained.” The decision isCalyon New York Branch v. American Home Mortgage Corp., et al. (In re American Home Mortgage Corp.), Bankr. Case No. 07-51704 (CSS) (Bankr. D. Del. Jan. 4, 2008).
The United States District Court for the Southern District of Texas, applying federal law, has reversed a bankruptcy court's ruling that the proceeds of an E&O liability policy were property of a bankruptcy estate. In re Burr Wolff, LP, 2007 WL 2964835 (S.D. Tex. Oct. 10, 2007). The court held instead that the issue was not ripe for adjudication because a declaratory judgment action concerning the insurer's obligations under the policy was pending, and thus "no proceeds" were currently available.
Lawmakers’ efforts to overhaul the nation’s bankruptcy laws two years ago as part of the sweeping reforms implemented by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA ”) failed to resolve a number of important business bankruptcy issues that have been and continue to be the subject of protracted debate among the bankruptcy and appellate courts.
Amendments to the Federal Rules of Bankruptcy Procedure (the “Rules”) became effective on December 1, 2007, after having been approved by the U.S. Supreme Court in April and transmitted to Congress in June. These amendments, which apply to cases already pending on December 1, 2007 as well as cases filed thereafter, make some significant changes that will directly impact debtors, creditors and other stakeholders.