April 17, 2009, will mark the three-and-one-half-year anniversary of the effective date of chapter 15 of the Bankruptcy Code, which was enacted as part of the comprehensive bankruptcy reforms implemented under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Introduction

Earlier this year, the United States Bankruptcy Court for the District of Delaware ruled that a nondebtor cannot effect a “triangular” setoff of the amounts owed between it and three affiliated debtors, even if the parties had entered into pre-petition contracts that expressly contemplated multiparty setoff.1 In reaching its decision, the Court relied principally on the plain language of section 553(a) of the United States Bankruptcy Code, which limits setoff to “mutual” obligations — i.e., direct obligations between a single obligor and obligee.

As the Madoff Securities and Stanford Financial schemes have unraveled in recent months, financial industry participants have had to scrutinize closely their involvement with these entities. A key issue in each of these cases will be the extent to which the trustee (or similar representative) can “claw back” payments made as part of the Ponzi and related fraudulent schemes. The U.S. Bankruptcy Court for the Southern District of New York recently considered similar facts in Bayou Accredited Fund, LLC v. Redwood Growth Partners, L.P.

Vedder Price Wins Reversal in Second Circuit Court of Appeals

With bankruptcy filings up by more than 25% in the recent past, and with the promise of many more to come in the near future, an increasing number of businesses and individuals may find themselves listed amongst the largest unsecured creditors of a debtor and with much to lose in a bankruptcy case. As one of the largest creditors, these same businesses and individuals may also find themselves being solicited to serve on “official” unsecured creditors’ committees.

The following is a list of some recent larger U.S. bankruptcy filings in various industries. To the extent you are a creditor to any of these debtors, or other entities which may have filed for bankruptcy protection, you as a creditor are entitled to certain protections under the Bankruptcy Code.  

OIL AND GAS  

Oil producer Transmeridian Exploration files for Chapter 11 protection in Texas.  

REAL ESTATE  

The devastating consequences of an enduring global recession for businesses and individuals alike have been writ large in headlines worldwide, as governments around the globe scramble to implement assistance programs designed to jumpstart stalled economies. Less visible amid the carnage wrought among the financial institutions, automakers, airlines, retailers, newspapers, homebuilders, homeowners, and suddenly laid-off workers is the plight of the nation's cities, towns, and other municipalities.

The following is a list of some recent larger U.S. bankruptcy filings in various industries. To the extent you are a creditor to any of these debtors, or other entities which may have filed for bankruptcy protection, you as a creditor are entitled to certain protections under the Bankruptcy Code.  

ENERGY  

Ethanol maker Aventine Renewable Energy Holdings Inc. files Chapter 11; operations to continue.  

INFORMATION TECHNOLOGY

Chapter 15 of the United States Bankruptcy Code, 11 U.S.C § 101 et seq., which incorporates most of the provisions of the United Nations’ Model Law on Cross-Border Insolvency,[1] was enacted as part of the Bankruptcy Abuse and Consumer Protection Act of 2005. Chapter 15 replaced former 11 U.S.C. § 304, which was been enacted in 1978 to provide specific procedures by which a representative in a foreign bankruptcy proceeding could obtain relief in U.S. courts to facilitate the foreign bankruptcy proceeding.