In light of the continuing economic downturn, many issuers with periodic reporting obligations under the Securities Exchange Act of 1934 are or may be faced with the prospect of reorganizing or liquidating under the United States Bankruptcy Code. These issuers must file their Exchange Act reports under the strain of the bankruptcy process, which imposes practical difficulties in completing and timely filing the reports during a time when resources are limited. Can these reporting requirements be modified so that issuers can more readily satisfy them?

The U.S. Court of Appeals for the Seventh Circuit held on May 5, 2009, that a group of secured lenders were fully secured and “entitled to a full recovery” from the debtor despite the bankruptcy court’s improper valuation of the collateral (improved airport terminal space) securing the lenders’ underlying $60 million loan. In re United Airlines, Inc., ___ F.3d ___, 2009 U.S. App. LEXIS 9648 (7th Cir. 5/5/09) (Easterbrook, Ch. J.). The lower courts had valued the lenders’ collateral at $35 million, leaving them with a $25 million unsecured claim.

In a recent decision, the Ninth Circuit Bankruptcy Appellate Panel (BAP) changed the legal landscape of bankruptcy asset sales. Prior to Clear Channel Outdoor, Inc. v. Knupfer, 391 B.R. 25 (B.A.P. 9th Cir. 2008), courts routinely stripped liens from assets purchased in a bankruptcy sale. Moreover, appeals of these sales were generally considered non-reviewable. The BAP in Clear Channel overturned these two longstanding features of bankruptcy asset sales, and, if followed, this decision could result in enforcement of existing property liens against asset purchasers.

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.  

AUTOMOTIVE

Mark IV Industries, affiliates file Chapter 11; reach “agreement in principle” with lenders.  

GAMING  

Following several weeks of speculation about how pending cash collateral, cash management, and debtor-in-possession financing motions might affect basic principles of structured finance, the bankruptcy court deferred a final ruling on the motions and extended the interim cash collateral order. In so doing, Judge Allan L. Gropper of the United States Bankruptcy Court for the Southern District of New York suggested that CMBS lenders organize themselves so that common issues can be identified and resolution expedited.

As widely reported, on April 30, 2009, (the Petition Date), Chrysler LLC and its 24 domestic and indirect subsidiaries (the Debtors) filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York (the Court).

As previously reported (3/17/08 post), this case involves the interpretation of the terms of a reinsurance contract and the duties of the parties under that contract. In the most recent development, the Eighth Circuit affirmed the Bankruptcy Appellate Panel’s judgment affirming in part, and reversing in part, a prior decision of the bankruptcy court regarding the reinsurance contract at issue.

Judge Arthur J. Gonzalez presided over hearings May 20, 2009, in this mega bankruptcy case. There were 21 matters on the agenda, as well as an emergency motion, that were heard or adjourned to a later date, in approximately two and a half hours of hearings (click here for a link to the audio file provided by the Clerk of the U.S. Bankruptcy Court for the Southern District of New York; it may take a moment to load before playing).

Retiree benefits are often a central issue in bankruptcy cases. For many employers the high cost of retiree medical benefits has been a significant contributing factor to the Chapter 11 filing and a matter of ongoing concern if the debtor is to be able to successfully reorganize. Understandably, employees, retirees and unions are equally concerned about the status of retiree benefits. Their obvious interest is to attempt to prevent the erosion of benefits that had been expected to be available during retirement.

On August 30, 2008, the United States District Court for the District of Northern Texas issued its ruling on whether Americas Mining Corporation (“AMC”) (and its parent Grupo Mexico) had caused ASARCO LLC (“ASARCO”), a wholly owned subsidiary of Grupo Mexico, to fraudulently transfer stock of Southern Peru Copper Company (“SPCC”) from ASARCO to AMC. The Court determined that AMC was liable for (1) intentional fraudulent transfer, (2) aiding and abetting breach of fiduciary duty under New Jersey law; and (3) civil conspiracy under Arizona law. See ASARCO LLC v.