The United States Bankruptcy Court for the District of New Jersey recently overruled a creditor’s objection to the debtors’ proposed chapter 13 plan, rejecting the association’s argument that its claim is secured by a consensual lien and may not be modified pursuant to 11 U.S.C. 1322(b)(2). Specifically, the Court found that a lien held by a New Jersey condominium or homeowners’ association can be either a statutory lien (subject to modification) or a consensual lien (not subject to modification) depending upon the circumstances presented. In re Keise, 564 B.R. 255 (Bankr. D.N.J.

Adams Resources Exploration Company, an oil and gas exploration and production company based in Houston, Texas, has filed a voluntary petition for relief under Chapter 11 under Chapter 11 in the United States Bankruptcy Court for the District of Delaware (Case No. 17-0866-KG).

The U.S. District Court for the Southern District of New York, in the case of HPIP Gonzalez Holding, LLC v. Sabine Oil & Gas Corp. (In re Sabine Oil & Gas Corp.), recently affirmed three decisions of the U.S. Bankruptcy Court for the Southern District of New York, finding that certain mineral gathering agreements could be rejected as executory contracts pursuant to 11 U.S.C. § 365(a).

Last December, we updated you that the Supreme Court was considering whether to grant review of In re The Village at Lakeridge, LLC, 814 F.3d 993 (9th Cir. 2016). Our original post is here. On March 27, 2017, the Supreme Court granted review of Village at Lakeridge, but only as to one question presented, the most boring one in our view.

ASARCO Standard

When the real estate market and financial markets tumbled during 2007-2008, the fallout was felt by financial institutions from large multi-billion dollar banks to small Community Banks. As these banks struggled to stay alive, a trend emerged for bank holding companies to market and sell a distressed bank through Section 363 of the Bankruptcy Code. This alternative was utilized in many instances as opposed to a traditional “reorganization plan” or takeover by the FDIC.

(Bankr. E.D. Ky. Apr. 13, 2017)

On March 30, the Third Circuit Court of Appeals filed an opinion regarding whether the filing of a mechanic’s lien after the commencement of a bankruptcy case violates the automatic stay. Given the frequent involvement of many companies in Delaware bankruptcy cases, you should be aware of the Third Circuit’s ruling.

Over the last several decades, the enforcement of intercreditor agreements ("ICAs") that purport to affect voting rights and the rights to receive payments of cash or other property in respect of secured claims have played an increasingly prominent role in bankruptcy cases. Although the Bankruptcy Code provides that "subordination agreement[s]" are enforceable in bankruptcy to the same extent such agreements are enforceable under applicable nonbankruptcy law, the handling of creditor disputes regarding such agreements has been inconsistent.i

The U.S. Court of Appeals for the Ninth Circuit recently reversed a ruling that disallowed an unsecured creditor’s claim filed in a California bankruptcy court based on the forum state’s statute of limitations.

In so ruling, the Ninth Circuit held that, although courts typically apply the forum state’s statute of limitations if the contract is silent on the issue, exceptional circumstances warranted the application of a longer statute of limitations here, because the creditor had no option but to enforce its claim in the forum based on where the bankruptcy petition was filed.