The United States Bankruptcy Court for the District of New Jersey has issued a published opinion authorizing a trustee’s transfer of structured settlement payments pursuant to the New Jersey Structured Settlement Protection Act, N.J.S.A. 2A:16-63, et seq. (NJ SSPA). In In Re Jackus, 2011 WL 118216 (Bankr. N.J. Jan. 14, 2011), the Bankruptcy Court held that, inter alia, the bankruptcy court had jurisdiction to authorize the transfer under the NJ SSPA, and the transfer was in the “best interest” of the bankruptcy estate and its creditors.

A decision out of the District Court for the Middle District of North Carolina (the “District Court”), now being appealed to the Fourth Circuit Court of Appeals, highlights just how critical it is for lenders to strictly comply with local recording requirements when recording their liens. In SunTrust Bank N.A. v. Northen, 433 B.R. 532 (M.D.N.C. Aug.

On February 7, 2011, in In re DBSD North America, Inc.,1 the Court of Appeals for the Second Circuit released its opinion joining the Third Circuit in condemning socalled “gifting plans,” thus deepening the perceived circuit split with the First Circuit which has been interpreted as approving of gifting plans. In so doing, the Second Circuit relied on the U.S. Supreme Court cases of Bank of Am. Nat’l Trust & Sav. Ass’n v. 203 N. LaSalle St. P’ship2 and Norwest Bank Worthington v.

So what do railroad barons, second lien lenders and satellites have in common? Strangely, the derailment of the gifting doctrine for cram-down plans, at least, in the Second Circuit. In an Opinion filed on February 7, 2011, the Second Circuit issued what amounted to a teaser for bankruptcy professionals. It started with a decision by Bankruptcy Judge Gerber of the Southern District of New York to confirm a Chapter 11 plan that included a “gift” from the second lien lenders to equity, even though unsecured creditors were not being paid in full.

In an apparent case of first impression in Massachusetts, the US Bankruptcy Court for the District of Massachusetts recently held that an allonge must be physically affixed to the original promissory note to be effective.

The Bankruptcy Appellate Panel for the Sixth Circuit Court of Appeals1 recently issued an opinion of importance in bankruptcy cases involving commercial real estate as the debtor’s only asset, such as a shopping center or office building.

Introduction

In January of this year, George L Miller, the chapter 7 trustee (the "Trustee") in the WL Homes bankruptcy, began filing avoidance actions against various creditors. As alleged in the complaints, the Trustee seeks the recovery of what he deems are "preferential transfers" pursuant to 11 U.S.C. section 547(b) of the Bankruptcy Code. This post will look briefly at the WL Homes bankruptcy, as well as provide information on common issues that arise in preference litigation.

Background on the Bankruptcy Proceeding

On February 1, 2011, AES Thames, LLC ("AES" or "Debtor") filed petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware. According to the Declaration of AES's President in Support of First Day Motions (the "Declaration"), AES owns and operates a coal-fired power plant in Montville, Connecticut.

On February 7, 2011, in a highly anticipated decision, the Second Circuit Court of Appeals held that in Chapter 11 reorganizations, senior creditors may not “gift” recoveries to junior creditors and/or equity interest holders over the objection of an intervening class. In In re DBSD N.A., Inc., __ F.3d __, 2011 WL 350480 (2d Cir. 2011), the majority ruled that such “gift plans” run afoul of the “absolute priority rule,” which is codified in Section 1129(b) of Bankruptcy Code. The decision has significant implications for future bankruptcy cases in New York.

The United States Bankruptcy Court for the District of Delaware recently dismissed equitable subordination and fraudulent transfer claims filed by the Official Committee of Unsecured Creditors of Champion Enterprises, Inc. ("Champion") against more than 100 prepetition lenders to Champion (collectively, the "Defendants")1.