Claims trading has become increasingly commonplace in today’s bankruptcy cases, typically with little need for policing by the courts.
The Supreme Court held that a statement about a single asset can be a “statement respecting the debtor’s financial condition” for purposes of determining the application of the exception to discharge set forth in Section 523(a)(2) of the Bankruptcy Code. Lamar, Archer & Cofrin LLP v. Appling, 2018 WL 2465174 (June 4, 2018).
The June 20, 2018 decision by the Delaware Bankruptcy Court in Woodbridge Group of Companies, LLC should prompt those involved in claims trading to reassess transactions where the underlying documents have anti-assignment provisions. Parties to loan transactions outside of a bankruptcy will also benefit from the court’s guidance on when assignments constitute a breach of the operative agreements, rather than being outright void. The lesson for all is that the treatment of an anti-assignment provision under Delaware law turns on the language of the operative document.
Should a Massachusetts homeowner be allowed to claim a homestead exemption in a principal residence that is also used for business or other commercial purposes? Answering this question several years ago as a matter of first impression, the U.S.
On May 25, 2018, the United States Court of Appeals for the Second Circuit (the “Court”) affirmed a district court’s affirmance of a bankruptcy court’s decision in In re Sabine Oil & Gas Corp. that permitted a debtor to reject a midstream gathering agreement as an “executory contract.”1 The Court’s decision, which is the first Court of Appeals to address the rejection of a midstream gathering agreement, firmly establishes a debtor’s right to do so under certain circumstances.
BACKGROUND
ABT Molecular Imaging, Inc. has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Case No. 18-11398). ABT, based in Louisville, TN, designs, manufactures and distributes the world’s first and only small-footprint Biomarker Generator for Fludeoxyglucose, the imaging agent used in positron emission tomography.
A bankruptcy court properly denied a bank's motion to compel arbitration of a debtor's asserted violation of the court's discharge injunction, the U.S. Court of Appeals for the Second Circuit held on March 7, 2018. In re Anderson, 2018 U.S. App. LEXIS 5703, 20 (2d Cir. Mar. 7, 2018). Finding a purported "inherent conflict between arbitration of [the debtor's] claim and the Bankruptcy Code," the Second Circuit reasoned that the bankruptcy court "properly considered the conflicting policies in accordance with law." Id., quoting In re United States Lines, Inc., 197 F.3d 631, 641 (2d Cir.
Among other things, the plan called for the Liquidating Trust to pursue causes of action belonging to the debtors’ estates. One of those causes of action related to a breach of a Chapter 11 asset purchase agreement between the debtors (as sellers) and the proposed purchaser, Brown Media Corporation, an entity created by one of the debtors’ shareholders to buy the debtors’ assets out of the bankruptcy case. In connection with its initial bid, the proposed purchaser had deposited $765,000 with an escrow agent as a good faith deposit.
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