Two recent decisions from the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court") have further contributed to the rapidly expanding volume of chapter 15 jurisprudence. In In re Fairfield Sentry Ltd., 2011 WL 1998374 (Bankr. S.D.N.Y. May 23, 2011), and In re Fairfield Sentry Ltd., 2011 WL 1998376 (Bankr. S.D.N.Y. May 23, 2011), bankruptcy judge Burton R. Lifland rendered two decisions involving offshore "feeder funds" that invested in the massive Ponzi scheme associated with Bernard L. Madoff Investment Securities LLC ("BLMIS").
In Stern v. Marshall, 131 S. Ct. 2594 (2011), the estate of Vickie Lynn Marshall, a.k.a. Anna Nicole Smith, lost by a 5-4 margin Round 2 of its Supreme Court bout with the estate of E. Pierce Marshall in a contest over Vickie's rights to a portion of the fortune of her late husband, billionaire J. Howard Marshall II. The dollar figures in dispute, amounting to more than $400 million, and the celebrity status of the original (and now deceased) litigants may grab headlines.
In connection with the administration of the debtors’ bankruptcy case, the trustee in Badovick v. Greenspan (In re Greenspan), No. 10-8019, 2011 Bank. LEXIS 272 (B.A.P. 6th Cir. Feb.
In Harrington v. Purdue Pharma L.P., 144 S. Ct. 2071 (2024) (“Purdue”), the Supreme Court held that the Bankruptcy Code does not authorize nonconsensual releases of nondebtors as part of a chapter 11 plan. The Court narrowly read the Code’s language, providing that a plan may “include any other appropriate provision not inconsistent with the applicable provisions of this title,” 11 U.S.C.
We have blogged previously about the intersection of fraud and bankruptcy.
To file bankruptcy in the U.S., a debtor must reside in, have a domicile or a place of business in, or have property in the United States. 11 U.S.C. § 109(a). In cross border chapter 15 cases, courts have considered whether a representative of a foreign debtor must satisfy that jurisdictional test.
Congress, the federal appellate courts and the U.S. Supreme Court all need to recognize this historical reality:
- bankruptcy is an efficient and effective tool for resolving mass tort cases, as demonstrated by cases with huge-majority approval votes from tort victims.
And all those institutions need to prevent anti-bankruptcy biases, legal technicalities, and hold-out groups from torpedoing the huge-majority votes.
Supreme Court moving in the right direction?
Judge Jacqueline P. Cox recently found that three Illinois attorneys violated their ethical obligations by failing to return their client’s phone calls. She thus ordered the attorneys to return half of their already-court-approved, and paid, flat fee.
In In re: Dennis Molnar, 19-bk-09525, 2024 WL 190919 (Jan. 17, 2024 N.D, Ill.), the debtor filed a petition seeking relief under chapter 13. Originally, three attorneys from the same firm represented the debtor. The attorneys appeared pursuant to a “no look,” flat-fee program for chapter 13 debtors’ attorneys.
On November 6, 2023, WeWork Inc. and several hundred of its affiliates filed voluntary chapter 11 cases in the US Bankruptcy Court for the District of New Jersey. According to a press release issued simultaneously with the filings, WeWork also intends to file recognition proceedings in Canada under Part IV of the Companies’ Creditors Arrangement Act. The press release also states that WeWork’s locations outside of the United States and Canada are not part of the reorganization process.
Over the past several years, unitranche facilities have become increasingly prevalent. This growth has been driven by the ever-growing class of private credit and direct lenders who initially developed the unitranche facility structure, along with traditional bank lenders now joining this market. The unitranche structure has several advantages, including typically quicker execution for the parties involved and in some cases a lower cost of capital to the borrower.