Global Insolvency | Daily News Headlines on Insolvency Developments across the Globe

Texas district court affirms the contractual default interest rate where the debtor is solvent

2010-09-13

Good v RMR Investments, Inc, 428 BR 249 (ED Texas, March 31, 2010)

CASE SNAPSHOT

A secured creditor in a chapter 11 case objected to the confirmation of the reorganization plan of the debtor, arguing that the proper “cramdown” interest rate (court-modified rate) was the pre-petition contractual default rate, rather than the significantly lower cramdown rate. After the debtor appealed, the District Court affirmed, holding that utilizing the contract rate of interest was appropriate because the debtor was solvent.

Filed under:

USA, Texas, Insolvency & Restructuring, Litigation, Reed Smith LLP, Debtor, Interest, Limited liability company, Maturity (finance), Default (finance), Secured creditor, Deed of trust (real estate), Title 11 of the US Code, United States bankruptcy court, Fifth Circuit

Authors:

Ann E. Pille

Location:

USA

Firm:

Reed Smith LLP

The Third Circuit overrules a long-standing case, changing the ability of personal injury plaintiffs to bring suit against debtors

2010-09-13

JELD-WEN, Inc v Van Brunt (In re Grossman’s Inc), (3d Cir No 09-1563, June 2, 2010)

CASE SNAPSHOT

Filed under:

USA, Insolvency & Restructuring, Litigation, Product Regulation & Liability, Reed Smith LLP, Bankruptcy, Debtor, Statutory interpretation, Due process, Liquidation, Precondition, Bankruptcy discharge, Title 11 of the US Code, United States bankruptcy court, Third Circuit

Authors:

Jennifer P. Knox

Location:

USA

Firm:

Reed Smith LLP

Delaware Bankruptcy Court finds appointment of examiner not required every time the statutory debt threshold is exceeded

2010-09-13

In re Spansion, Inc, 426 BR 114 (Bankr Del April 1, 2010)

CASE SNAPSHOT

Filed under:

USA, Delaware, Insolvency & Restructuring, Litigation, Reed Smith LLP, Debtor, Unsecured debt, Fraud, Interest, Misconduct, Discovery, Debt, Vacated judgment, Misrepresentation, Title 11 of the US Code, United States bankruptcy court

Authors:

Elizabeth A. McGovern

Location:

USA

Firm:

Reed Smith LLP

The Third Circuit expands the substantial-performance test to determine if a trademark license contract is executory

2010-09-13

In re Exide Technologies, 607 F3d 957 (3rd Cir June 1, 2010)

CASE SNAPSHOT

Filed under:

USA, Insolvency & Restructuring, Litigation, Trademarks, Reed Smith LLP, Bankruptcy, Debtor, Breach of contract, Employment contract, Second Circuit, United States bankruptcy court, Third Circuit

Authors:

Christopher O. Rivas

Location:

USA

Firm:

Reed Smith LLP

Sellers beware - unauthorized payments from ‘cash collateral’ will be avoided

2010-09-13

Suppliers to chapter 11 debtors-in-possession should always ensure that they are not being paid from the debtor’s “cash collateral” without court approval. Marathon Petroleum Company supplied products to debtor Delco Oil in the ordinary course of its business during the bankruptcy case, but was forced to return all of the postpetition payments it received from Delco, pursuant to section 549 of the Bankruptcy Code. Marathon was required to return these payments because they were deemed part of the cash collateral that was secured by Delco’s pre-petition creditor, CapitalSource Finance.

Filed under:

USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Collateral (finance), Secured loan, Title 11 of the US Code, Uniform Commercial Code (USA), Trustee, United States bankruptcy court

Authors:

Christopher O. Rivas

Location:

USA

Firm:

Reed Smith LLP

An LLC member/manager is an ‘insider,’ so that payments are preferential transfers subject to avoidance up to one year prior to bankruptcy filing

2010-09-13

Longview Aluminum, LLC v Brandt (In re Longview Aluminum, LLC), 2010 WL 2635787 (ND Ill, June 28, 2010)

CASE SNAPSHOT

Filed under:

USA, Illinois, Company & Commercial, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Board of directors, Limited liability company, Consent, Title 11 of the US Code, Trustee, United States bankruptcy court, Seventh Circuit

Authors:

Location:

Firm:

2010-09-13

In this edition of the Landlord’s Corner, we review various cases that address the (i) rights of landlords to recover their property post-rejection, (ii) whether payments pursuant to a termination of lease agreement constitute preferential transfers and (iii) whether a lease could be retroactively rejected in the absence of a formal motion to reject.

Filed under:

USA, Insolvency & Restructuring, Litigation, Real Estate, Reed Smith LLP, Bankruptcy, Debtor, Landlord, Westlaw, Title 11 of the US Code, Trustee, United States bankruptcy court, First Circuit

Authors:

Derek J. Baker

Location:

USA

Firm:

Reed Smith LLP

Court breaks from majority rule, granting retirees post-petition rights greater than pre-petition rights

2010-09-13

IUE-CWA v Visteon Corporation, 2010 WL 2735715 (3rd Cir July 13, 2010)

CASE SNAPSHOT

Filed under:

USA, Employee Benefits & Pensions, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Debtor, Life insurance, Good faith, Collective bargaining agreements, Majority opinion, US Congress, Communications Workers of America, Trustee, Second Circuit, United States bankruptcy court, Third Circuit

Authors:

Christopher O. Rivas

Location:

USA

Firm:

Reed Smith LLP

Broader economic woes may have played a part in the court’s decision to dismiss allegations of lender overreaching

2010-09-13

American Consolidated Transportation Companies, Inc v RBS Citizens NA (In re American Consolidated Transportation Companies, Inc), Adversary No 10-00154, Bankruptcy No 09-26062 (Bankr ND Ill July 13, 2010)

CASE SNAPSHOT

Filed under: