Introduction
In a recent decision, the United States Bankruptcy Court for the Southern District of New York found that the Statutory Committee of Unsecured Creditors (the “Committee”) of Iridium, a failed Motorola spin-off venture, was unable to prove that Iridium was insolvent or had unreasonably small capital during the four-year period prior to commencement of its bankruptcy case.
On November 8, 2013, three monoline insurers of the City’s general obligation bonds commenced adversary proceedings in the City of Detroit bankruptcy case.1 Through these actions, the monoline insurers seek to compel enforcement of the status quo for the general obligation bonds by requiring the City to continue to segregate ad valorem taxes in accordance with Michigan law. As these actions progress, they may clarify whether state law protections for general obligation bonds apply in chapter 9 and test the jurisdictional limitations imposed on a bankruptcy court by se
Late last week, Judge Shelley C. Chapman of the U.S. Bankruptcy Court for the Southern District of New York heard arguments from a number of parties regarding whether the New York bankruptcy court is the proper venue for Patriot Coal Corporation’s bankruptcy cases. In re Patriot Coal Corp., Case No. 1:12-bk-12900. Judge Chapman did not rule on the venue question from the bench. Instead, the parties will wait for a ruling while proceeding with the bankruptcy case.
On April 19, 2012, the U.S. Bankruptcy Court for the Southern District of New York granted in part and denied in part JPMorgan Chase, N.A.’s motion to dismiss an adversary complaint filed by Lehman Brothers Holdings Inc. (“LBHI”) and its Official Committee of Unsecured Creditors. The Complaint seeks to recover approximately $8.6 billion in prepetition transfers made by LBHI to JPMorgan in the days leading up to LBHI’s bankruptcy.
On September 21, 2010, the United States District Court for the Southern District of New York granted BNY Corporate Trustee Services Limited leave to appeal a decision of the Bankruptcy Court in the Lehman Brothers bankruptcy case.1 The Bankruptcy Court held that a key provision of certain transaction documents constituted an unenforceable ipso facto clause. The District Court granted leave to appeal the Bankruptcy Court decision even though it was interlocutory.
Introduction
The United States Bankruptcy Court for the Southern District of New York ruled recently on the validity of “gift plans” – plans of reorganization under which a senior creditor “gifts” assets to a junior creditor or equity holder.1 In In re Journal Register Co.,2 Bankruptcy Judge Alan L. Gropper approved a plan in which secured lenders gifted a portion of their recovery to certain trade creditors, and detailed some of the important limitations on gift plans.
Evolution of the Gift Plan Doctrine
Our May 11th memo entitled “General Growth Properties Bankruptcy Court Defers Final Ruling on Cash Collateral, Cash Management and DIP Financing Issues” concluded that the ultimate impact of the bankruptcy filings of General Growth Properties, Inc. and its affiliates would depend in large part on how the cash collateral and DIP Loan issues were resolved. On May 13th, Judge Allan L. Gropper, the U.S. Bankruptcy Judge before whom these bankruptcies are pending, entered final orders on the pending cash collateral, cash management and debtor-in-possession financing motions.
In In re Arch Wireless,1 the United States Court of Appeals for the First Circuit held that a creditor who asserted claims against the debtor in various correspondence between the parties was a “known” claimant of the debtor’s estate entitled to direct notice of the bar date by which it must file a proof of claim. The Court of Appeals concluded that publication notice was insufficient to inform the creditor of the bar date or of the terms of the confirmed plan, even though the creditor was generally aware of the debtor’s bankruptcy filing.
As recently reported in our Fall 2007 issue, Judge Lifland’s decision in In re Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd.,1 limited the ability of offshore funds in financial distress to utilize chapter 15 of the Bankruptcy Code.