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First Circuit Rules That “Incorporation by Reference” of Collateral Description in UCC Financing Statements May Not Perfect Lien

February 14, 2019 | Blog | By William Kannel, Leonard Weiser-Varon, Eric Blythe

Tolstoy warned that “if you look for perfection, you’ll never be content”; but Tolstoy wasn’t a bankruptcy lawyer.  In the world of secured lending, perfection is paramount. A secured lender that has not properly perfected its lien can lose its collateral and end up with unsecured status if its borrower files bankruptcy. 
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The Delaware Bankruptcy Court Grapples With Section 546(e) Post-Merit Management

January 18, 2019 | Blog | By Andrew B. Levin

In its ruling in FTI Consulting, Inc. v. Sweeney (In re Centaur, LLC), the United States Bankruptcy Court for the District of Delaware addressed the Supreme Court’s recent clarification of the scope of Bankruptcy Code Section 546(e)’s “safe harbor” provision, affirming a more narrow interpretation of Section 546(e).
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Supreme Court to Decide Whether Debtors Can Terminate a Licensee’s Rights to Trademarks under License Agreements

December 7, 2018 | Blog | By Tim McKeon

Ninth Circuit: No Ulterior Motive, No Bad Faith When Buying Claims to Block Confirmation

July 24, 2018 | Blog | By Kevin Walsh

A recent Ninth Circuit Court of Appeals decision provides insight into “bad faith” claims-buying activity; specifically whether a creditor’s purchase of claims for the express purpose of blocking plan confirmation is permissible.

Non-Debtor Substantive Consolidation: Do Recent Cases Signal a Judicial Preference for State Law Claims?

July 11, 2018 | Blog | By Charles W. Azano

It is not unusual for a creditor of a debtor to cry foul that a non-debtor affiliate has substantial assets, but has not joined the bankruptcy.

Supreme Court Bankruptcy Thoughts: Scope of Safe Harbor and Appellate Review

May 3, 2018 | Blog | By Sarah Ramuta

The Supreme Court recently addressed two bankruptcy issues. In its Merit Management opinion, the Court resolved a circuit split regarding the breadth of the safe harbor provision which protects certain transfers by financial institutions in connection with a securities contract.

Checking-In: Chapter 9, Chapter 11 or Ineligible?

February 23, 2018 | Blog | By William Kannel, Charles W. Azano

Last week, President Trump unveiled his proposal to fix our nation’s aging infrastructure. While the proposal lauded $1.5 trillion in new spending, it only included $200 billion in federal funding. To bridge this sizable gap, the plan largely relies on public private partnerships (often referred to as P3s) that can use tax-exempt bond financing.

The First Circuit Casts a Shadow on Sunbeam

February 12, 2018 | Blog | By Amanda M. Blaske

In the recently decided case, Mission Product Holdings, Inc. v. Tempnology, LLC, the United States Court of Appeals for the First Circuit took a hardline position that trademark license rights are not protected in bankruptcy. Bankruptcy Code section 365(n) permits a licensee to continue to use intellectual property even if the debtor rejects the license agreement.

In Massachusetts, Directors and Investors Acting in their Normal Capacities Do Not Have Personal Liability for Wage Act Violations

February 8, 2018 | Blog | By Kevin Walsh

The Massachusetts Supreme Judicial Court recently held that the Massachusetts Wage Act does not impose personal liability on board members or investors acting in their normal capacities.

Split Third Circuit Holds Transfer By Non-Debtor Cannot Be Fraudulent Transfer

January 31, 2018 | Blog | By Kevin Walsh

Refusing to rely on “equitable principles” when interpreting the Delaware Uniform Fraudulent Transfer Act (DUFTA), the Third Circuit (2-1 decision) in Crystallex Int’l Corp. v. Petroleos De Venezuela, S.A, et als. held that a transfer by a non-debtor cannot be a fraudulent transfer.

A Momentive Decision: Second Circuit Splits with Third Circuit on Make Whole Premiums; Adopts Sixth Circuit’s Two-Step Approach in Selecting an Interest Rate in Chapter 11 Cramdowns

October 25, 2017 | Blog | By Kaitlin R. Walsh

Last week the Second Circuit issued its long-awaited opinion on the appeals of plan confirmation taken by the first lien, 1.5 lien and subordinated noteholders in In re MPM Silicones, LLC (“Momentive”). With one exception, the Court determined that the plan confirmed by the bankruptcy court in September 2014 comports with Chapter 11 of the Bankruptcy Code.

Bankruptcy Restrictions in Operating Agreement Held Unenforceable

October 4, 2017 | Blog | By Kevin Walsh

In In Re Lexington Hospitality Group, LLC, the United States Bankruptcy Court for the Eastern District of Kentucky thwarted a lender’s efforts to control whether its borrower could file bankruptcy.

Delaware Court Holds that Trademark License Cannot be Assigned Without Consent

August 28, 2017 | Blog | By Kevin Walsh

The Delaware bankruptcy court recently decided that a debtor could not assign a trademark license absent the consent of the licensor. The court concluded that federal trademark law and the terms of the license precluded assignment without consent.

Exculpatory Provisions Under Delaware Law: Say What You Mean And Mean What You Say

July 10, 2017 | Blog | By Kevin Walsh

Exculpation provisions in operating agreements must be carefully crafted in order to protect members, managers, directors and officers for breaches of fiduciary duties. In In re Simplexity, LLC, the Chapter 7 trustee sued the former officers and directors (who were also members and/or managers) for failing to act to preserve going concern value and exposing the debtors to WARN Act claims. 

SCOTUS to Settle Circuit Split on Rule Applicable to Recharacterization of Debt to Equity Disputes

July 5, 2017 | Blog | By Kaitlin R. Walsh

The Supreme Court has granted certiorari to decide the question of whether bankruptcy courts should apply state law or a federal rule of decision when determining whether to recharacterize a debt claim as a capital contribution.

First Circuit Rules that Bankruptcy Court “Retention of Jurisdiction” Provisions Not Enough to Establish Jurisdiction

June 15, 2017 | Blog | By Adrienne K. Walker

It is very common for bankruptcy court orders to provide that the court retains jurisdiction to enforce such orders. Similarly, chapter 11 confirmation orders routinely provide that the bankruptcy court retains jurisdiction over all orders previously entered in the case. 

Supreme Court to Resolve Circuit Split on Scope of 546(e)’s Safe Harbor Provision

May 15, 2017 | Blog | By Kaitlin R. Walsh

Earlier this month, the Supreme Court announced that it will review the scope of Bankruptcy Code section 546(e)’s safe harbor provision. Section 546(e) protects from avoidance those transfers that are made “by or to (or for the benefit of)” a financial institution, except where there is actual fraud.

Bankruptcy Settlements Post-Jevic: Potential New Requirements for Priority-Altering Settlements

May 9, 2017 | Blog | By Kevin Walsh

As noted in a recent Distressing Matters post, the United States Supreme Court in In re Jevic Holding Corp. held that debtors cannot use structured dismissals to make payments to creditors in violation of ordinary bankruptcy distribution priority rules. 

When Hiding Assets Doesn't Work: How Mintz Recovered $20M for Cheated Client

April 19, 2017 | Blog | By Eric Blythe

In a recent American Law Journal article, "When Hiding Assets Doesn't Work: How Mintz Recovered $20M for Cheated Client," Daniel Pascucci and Joe Dunn detail the extensive efforts used to hold a judgment creditor accountable -- 10 years and $20 million later, the case exemplifies the old saying that you can run, but you can't hide.

Keep On Truckin’: Priority Rules Still Rule in Structured Dismissals

April 11, 2017 | Blog | By Aaron Williams

In 2015, Distressing Matters reported on the Third Circuit’s decision in In re Jevic Holding Corp., wherein that panel ruled that, in rare circumstances, bankruptcy courts may approve the distribution of settlement proceeds in a manner that violates the Bankruptcy Code’s statutory priority scheme.

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