Geltzer v. Mooney (In re MacMenamin’s Grill Ltd.), Adv. Case. No. 09-8266, Bankr. Case No. 08-23660, 2011 WL 1549056 (Bankr. S.D.N.Y. Apr. 21, 2011)

CASE SNAPSHOT

The U.S. Court of Appeals for the Seventh Circuit recently affirmed a bankruptcy court’s decision refusing to confirm debtors’ reorganization plan that included auction procedures that forbade secured creditors from “credit bidding” for the assets. Inre River Road Hotel Partners, LLC, No. 10-3597, 2011 WL 2547615 (7th Cir. June 28, 2011). In that case, the debtors (owners of various hotel properties) proposed a plan of reorganization that included auctioning certain properties encumbered by security interests.

On September 7, 2011, NewPage Corporation ("NewPage" or "Debtors") filed petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware.  As stated in NewPage's Declaration in Support of First Day Motions (the "Declaration" or "Decl."), filed with the Bankruptcy Court, NewPage produces coated paper used in magazines, brochures catalogs and textbooks.  NewPage manufactures its products in paper mills located in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and in Nova Scotia, Canada.  Decl. at *4.

On August 16, 2011, the Second Circuit held that Irving H. Picard, the Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC ("Trustee"), utilized the correct methodology to determine the "net equity" of each Madoff investor under the Securities Investor Protection Act ("SIPA").

The United States Bankruptcy Court for the Central District of California recently held that the filing of a bankruptcy petition by a borrower can void a trustee sale even where the petition is filed after the trustee sale, so long as the borrower files the petition before the execution of the trustee's deed upon sale. In re: Gonzales 2011 WL3328508 (Bkrtcy. C.D.Cal. August 1, 2011).

The U.S. Court of Appeals for the Second Circuit recently held that prematurity redemptions of commercial paper made by Enron Corp. shortly before it filed for bankruptcy were protected from avoidance by 11 U.S.C. § 546(e)’s safe harbor for securities transaction settlement payments. In re Enron Creditors Recovery Corp. v. Alfa., No. 09-5122-bk (2d Cir. June 28, 2011). In so doing, the Second Circuit resolved a clash between the Bankruptcy Code’s interest in avoiding preferential debt repayment and the securities industry’s interest in preserving transaction finality.

In re Red Mountain Machinery Company, 448 B.R. 1 (Bankr. D. Ariz. 2011)

CASE SNAPSHOT

In re XMH Corp., Nos. 10-2596, 10-2597, 10- 2598 and 10-2599 (7th Cir. July 26, 2011)  

CASE SNAPSHOT

The Seventh Circuit Court of Appeals recently answered the following questions: (a) whether, under the Bankruptcy Code, a trademark license is assignable (that is, salable) without the licensor’s permission, in the absence of a clause in the agreement stating that it is assignable (NO); and (b) whether a trademark license can be “implied” in an agreement that does not say it’s a trademark license (NO).

FACTUAL BACKGROUND

The Seventh Circuit recently weighed in on the issue of whether a secured creditor has a right to credit bid at the sale of its collateral in connection with a chapter 11 plan of reorganization. In its decision in In re River Road Hotel Partners, LLC, Case Nos. 10-3597 & 10- 3598 (7th Cir. June 28, 2011), the Seventh Circuit split with decisions of the Third and Fifth Circuit Courts of Appeal holding that secured creditors have no such right to credit bid, raising the prospect that the issue may be ripe for review by the United States Supreme Court.

Introduction