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Arizona power-plant operator Sundevil Holdings Inc. filed for chapter 11 Tuesday after defaulting on more than $237 million in debt. Read the Daily Bankruptcy Review article here. (Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit http://on.wsj.com/DJBankruptcyNews, scroll to the bottom and click “try for free.”) Oil is sliding toward $25 a barrel, which means more cuts are lurking for already-struggling companies in the oil patch, The Wall Street Journal reports. Bankruptcy Beat catches up on the legal bar brawl between the Revel casino in Atlantic City, N.J., and its shuttered restaurants.

Read More from: WSJ.com: Bankruptcy Beat

8 hours 34 min ago
Further to Mark's post on the settlement negotiations, we now have an order from Judge Griesa that brings more love from New York to Argentina than it has seen in a decade, maybe ever. The order, granted near-instantly on the Republic's request, tells the remaining holdouts (call them hyper-holdouts for short), to show the court by February 18 why it should not lift the pari passu injunctions. It turns the question, "Why should the court help Argentina?" into "Why not?" Why not, indeed? Mark rightly points out that it takes more than a whim and a ray of sunshine to dissolve or fundamentally change a permanent injunction. But fundamental change is in the eye of the beholder, especially when a government is involved, especially when a big election intervenes.

Read More from: Credit Slips

17 hours 48 min ago
Once again, Orrick has been ranked a Top Ten Bankruptcy Law Firm by The Deal Pipeline. These rankings are released on a quarterly basis, compiling comprehensive deal intelligence to identify the leading law, crisis management, investment, and non-investment firms and professionals involved in bankruptcy transactions throughout the United States. After cracking the top ten in Q1, Orrick remained among the top ten bankruptcy law firms in every quarter in 2015. Orrick’s restructuring team enjoyed a busy year, including such recent highlights as representing the City of Stockton in its exit from bankruptcy and dismissal of an appeal filed by holdout creditor Franklin Templeton in the US Bankruptcy Appellate Panel of the Ninth Circuit; Tirreno Power on a complex corporate reorganization including the negotiation and drafting of a €1 billion debt restructuring agreement, which was awarded Restructuring Deal of the Year at the 2016 Legalcommunity Energy Awards; and IFM Investors Pty Ltd, on behalf of IFM Global Infrastructure Fund, in its $5.72 billion acquisition of 100% of the membership interests of ITR Concession Company, which operates and maintains the Indiana Toll Road – named M&A Deal of the Year by ​M&A Advisor. To see the complete list of rankings, please click here.
1 day 6 min ago
In re Barrett, ND California 2016, lawyer debtor The United States Bankruptcy Court for the Northern District of California issued an interesting ruling that discharged over a quarter millions dollars of federal student loan debt for a 56-year-old securities law attorney (In re Barrett, Case No 14-43516). Kevin Barrett is a single man who has been a licensed attorney since 1987.  He is in good health and has no dependents.  At one point he earned as much as $165,000 per year as a securities lawyer, but that income ended in 2007.  He earned very little for the next 4 years.  In 2011 he was hired for $98,000 per year by another firm until August of 2013 when he was terminated.  Since that time he has struggled to earn more than $10,000 per year in his own practice. The debtor did not live extravagantly. He paid $750 per month for rent and drove an older car. He had no savings or retirement account. The debtor had paid nearly $40,000 in student loan payments over the years.
1 day 1 hour ago
Authored by Heather S. NasonThe Federal District Court for the Middle District of Florida ruled last month that a lender does not need to show cause as a condition to enforcing an assignment of rents. In PNC Bank v. Maranatha Properties, Inc., No. 5:15-cv-563-Oc-30PRL, 2016 WL 319255 (M.D. Fla. Jan. 26, 2016), PNC initiated a foreclosure of a mortgage on properties in Marion and Lake Counties, Florida that secured a $1,800,000 loan to Maranatha. In connection with the loan and mortgage on the properties, Maranatha also executed an Assignment of Rents and Leases providing for an unconditional assignment of leases, rents and profits derived from the properties in the event of a default. After Maranatha defaulted on the loan, PNC sought to enforce the Assignment of Rents under Florida Statute § 697.07. Maranatha argued that PNC could not enforce the assignment of rents because the value of the mortgaged properties was sufficient to satisfy the mortgage debt. In support of its argument, Maranatha relied on an opinion from the 4th DCA in which the court held that in determining whether to appoint a receiver where rents and profits have been pledged, a court may first consider whether the value of the mortgaged property alone would be sufficient to satisfy the mortgage debt.

Read More from: Florida Banking Law Blog

1 day 3 hours ago
In a decision with significant implications for investors and underwriters alike, the Court of Appeals for the Second Circuit has held that contribution claims arising from the purchase and sale of a security of an affiliate of the debtor can and should be subordinated under section 510(b) of the Bankruptcy Code.  The decision, ANZ Securities, Inc. v. Giddens (In re Lehman Bros. Inc.), stemmed from the liquidation of Lehman Brothers, Inc. (LBI) pursuant to the Securities Investor Protection Act and is one of many precedential bankruptcy decisions arising from the Lehman cases.  Background LBI was the lead underwriter for certain notes issues by one of its affiliates, a debtor in a separate chapter 11 case.  The appellants asserted that, as co-underwriters for the notes, they allegedly incurred defense and other costs as a result of lawsuits commenced against them by investors in the notes.  After the appellants filed claims against LBI for reimbursement or contribution of these costs, LBI sought to subordinate those claims pursuant to section 510(b) of the Bankruptcy Code.
1 day 3 hours ago
Chris Ware/Bloomberg News
Hundreds of dollars in car-service charges, meals costing $50 a head and overly expensive copying charges are among the expenses that a government watchdog is targeting in supermarket operator A&P’s bankruptcy case. U.S. Trustee William K. Harrington recently filed court papers raising questions about thousands of dollars in expenses that several law and consulting firms incurred for their work on A&P’s liquidation. In bankruptcy, legal and other professional bills are subject to public scrutiny and court approval. Bankruptcy watchdogs like Mr. Harrington, who is part of the Justice Department, also keep an eye on the bills in what is typically an expensive process.

Read More from: WSJ.com: Bankruptcy Beat

1 day 3 hours ago
This March 28, 2012, photo shows gambling chips on a card table at the former Revel casino in Atlantic City, N.J.
Associated Press
Glenn Straub is “at it again,” according to lawyers for a handful of deserted restaurants trapped inside the shuttered Revel Casino Hotel in Atlantic City, N.J. Bankruptcy-court papers filed earlier this month show yet another dispute between the restaurants and the Florida-based developer has flared up, this time fueled by nearly a quarter million dollars of alcohol—beer, wine and liquor left behind in the darkened resort. Last spring, a bankruptcy judge approved an $82 million sale of Revel to Mr. Straub, ending nearly 10 months of courtroom combat for control of the property. The purchase price amounted to more than a 96% discount from the $2.4 billion it cost to build Revel. Revel never turned a profit after opening its doors in 2012 and landed in chapter 11 twice in just two years.

Read More from: WSJ.com: Bankruptcy Beat

1 day 4 hours ago
Sundevil Power Holdings, LLC and SPH Holdco LLC have each filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code before the United States Bankruptcy Court for the District of Delaware (lead case no. 16-10369).  The debtors are merchant power generators and own two 550 megawatt natural gas-fired power blocks of the Gila River Power Station, located in Gila Bend, Arizona.  The cases have been assigned to the Honorable Kevin J. Carey.  The debtors will seek authority to obtain $45 million in debtor-in-possession financing and to sell substantially all of their assets.  The petition (including the consolidated list of top 20 creditors), the first day declaration and the docket are available through Garden City Group. Contact Norman L. Pernick, Nicholas J. Brannick, or David W. Giattino for more information.
1 day 4 hours ago
Invest Wisely I have to share with you a cautionary tale of a prior client who had an investment in a real estate property on the South side of Chicago. The neighborhood in which he invested was not great.  In fact, it’s one of the two or three neighborhoods in Chicago that has not seen+ Read More The post When Bankruptcy Is Not Enough: Be Careful When Investing In Suspect Real Estate appeared first on David M. Siegel.
1 day 5 hours ago
I get asked by clients all the time why they are now being sued for a debt they guaranteed or co-signed with another individual, usually a relative or close friend.  They will say “I am just the co-signor.  It is their debt.”, or “They are the primary, I am just the secondary.” Creditor’s Right to Sue You Unfortunately, whenever you sign your name on loan papers whether it is for your debt or someone else’s, you are creating a binding legal relationship.  The lender, also called the creditor be it a bank, credit union or credit card issuer has obtained in the fine print the right to sue you on your guaranty for the debt involved.  In other words you and the person you are signing with are both equally 100% liable for the debt. Hopefully, the person with whom you have co-signed, with will make every payment as they become due and you will never be confronted with this issue.  But, if they ever default on payments, the creditor has the right to come after you and they almost always do so.  The creditor does not even have to sue the primary with you on the lawsuit especially if they know you have the means to pay the debt and the primary does not. In reality, that is the main reason you were asked to sign in the first place, because the creditor knew you could pay if the primary did not.

Read More from: Bonds & Botes, P.C.

1 day 5 hours ago
northwestbankruptcyattorneys.com Tax refund season is typically the busiest time of year for bankruptcies to be filed.  The reason is pretty simple, people who have been slogging along trying to pay their bills have not had the extra money to use for a bankruptcy attorney.  Their tax refunds change that and finally make it possible for many people to get their cases filed. If you are considering bankruptcy there are some things to keep in mind if you are expecting a big tax refund. Filing a case before you receive the refund can lead to some or all of the refund having to be turned over to your bankruptcy trustee.  This all depends on your state’s exemptions. Some states, Ohio for example, will allow you to exempt all of your additional child tax credit and earned income credit.  Some states, Washington and New York for example,  allow you to use either state or… View original post 188 more words
1 day 6 hours ago
When I tell a client to stop paying credit cards, they look at me as though I’d suggested they jump into shark infested waters.But they’ll start calling me”, they wail. “I’ll be sent to collection“. In their mind, “collection” is a real place, with manacles dangling, barred windows, and water dripping down moldy dungeon walls. Turns out that it’s not very likely you’ll deal with a debt collector, according to  Lessons on debt collection, published in the San Jose Mercury News. The interviewee was a former president of the California Association of Collectors. Debt collectors more reputation than fact Truths about debt collection:
  • Only 6 % of consumer debt is turned over for collection
  • The rate of collection on those accounts is 13%, down from 17% two years ago
  • One half of 1% of the people turned over to collection are sued
The weapons of a debt collector are mostly psychological: all a phone call can REALLY do is attempt to get you to write a check. If you don’t pay them, the collector has to either continue psychological warfare, give up, or sue.
1 day 7 hours ago
The shell of mobile accessory maker Targus has filed for chapter 11 protection to help settle its final affairs. The Wall Street Journal has the Daily Bankruptcy Review article here. (Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit http://on.wsj.com/DJBankruptcyNews, scroll to the bottom and click “try for free.”) DBR reports via WSJ that the struggling SunEdison is facing more woes, thanks to a failed Latin American power deal. Oil and debt don’t mix—something private-equity firm KKR & Co. learned the hard way, WSJ reports.

Read More from: WSJ.com: Bankruptcy Beat

1 day 8 hours ago
Action Item.  Let’s urge all constituencies in every Chapter 11 case to create a “successful path” toward plan confirmation by seeking the appointment of a mediator. #caesarsentertainment   #bankruptcy   #mediation  #bankruptcymediation

Read More from: Mediatbankry

1 day 8 hours ago
Businesses should be aware that new anti-avoidance tax rules will take effect from 6 April 2016 which will have a negative impact on members’ voluntary liquidations (“MVLs”). The new rules are part of a crackdown by Revenue and Customs to avoid ‘income-into- capital’ tax planning. This is probably in part due to the higher dividend tax rates coming into force in April this year which will further increase the incentive for returns to be taxed as capital rather than income. Under the current rules, distributions in MVLs are taxed as capital gains (rather than income), which has lower rates and specific exemptions. However, with effect from 6 April 2016, certain MVL distributions will be taxed as income and to really stick the boot in, the tax rate on income distributions will increase by an effective 7.5%. The cumulative effect of an MVL distribution being taxed as income and the rise in the tax rate will be to increase the tax levied up to a staggering 28%.

Read More from: eSQUIRE Global Crossings

1 day 9 hours ago
In this day and age, there’s not much appetite for the artificial (whether it be artificial sweetener or feigned affection).  We want our food, relationships, and clothing to be authentic and legitimate.  Unfortunately, as demonstrated by a recent decision from the Sixth Circuit Court of Appeals, artificiality still manages to creep into certain chapter 11 plans and courtrooms in the form of “artificial impairment.”  Artificial impairment refers to a scenario whereby a debtor, which may otherwise be capable of satisfying a class of claims in full, proposes to impair the claims in that particular class (quite often, only ever so slightly) in order to contrive an “impaired accepting class” for purposes of section 1129(a)(10) of the Bankruptcy Code.  Section 1129(a)(10) states that a plan can only be confirmed when at least one class of claims that is impaired under the plan has voted to accept the plan.  In Village Green I, GP v. Fed. Nat’l Mortg. Assoc’n, the Sixth Circuit considered the appropriate legal framework for addressing allegations of artificial impairment and whether such allegations should be addressed under section 1129(a)(10) or section 1129(a)(3) of the Bankruptcy Code, which requires that a plan be proposed in good faith.  Read on to find out the answer!  Facts
2 days 3 hours ago
It’s never too late to value a lien and avoid it in bankruptcy. Even after the Chapter 13 case is done and closed. So says the 9th Circuit Bankruptcy Appellate Panel in Chagolla, decided February 9, 2016.
In the absence of prejudicial delay, we find that a motion to value and avoid the lien of a junior lienholder may be brought after discharge if the confirmed plan called for its avoidance and treated it as unsecured and if no prejudice to the  junior lienholder will occur
And it’s a welcome decision in Northern California, where a number of courts have held that failure to value a lien in advance of confirmation of a Chapter 13 prevents subsequent avoidance of the lien. Lien slips through cracks Here’s what happened to Lucio and Maria when they filed Chapter 13 in 2008. Chase held a junior mortgage on the their home which was way underwater at filing.  The debtors’ plan proposed that the debtor would bring an adversary proceeding to strip off the lien. For reasons not explained, the adversary was never brought, the Chase lien was treated as an unsecured claim in the bankruptcy, and the plan completed five years from filing. With the Chase lien still on title.
2 days 6 hours ago
On Monday in the Samson Resources Corporation Chapter 11 bankruptcy case, Delaware’s Judge Sontchi adopted Judge Walrath’s recentBaker Botts opinion in Delaware’s Boomerang Tube Chapter 11 case regarding fee-defense costs after Baker Botts. As we discussed last week, Judge Walrath’s opinion interpreted the U.S. Supreme Court’s Baker Botts, L.L.P. v. ASARCO opinion, a case that we’ve been covering since last June. Specifically, she held that neither § 328(a) of the Bankruptcy Code, nor a retention agreement provides a sufficient Baker Botts workaround. As a recap, the Supreme Court held in Baker Botts that professionals employed under § 327(a) may not be reimbursed for fees that they incur in defending their bankruptcy fee applications. Judge Sontchi’s Letter to Counsel

Read More from: Plan Proponent

2 days 6 hours ago
The Federal Court of Australia has approved a settlement, effectively resolving one of the most complex corporate insolvencies in Australian history. On 18 December 2015 the Federal Court of Australia approved a settlement relating to inter-company loans and disputed assets between the liquidators of Lehman Brothers Australia Ltd (LBA) and American parent company Lehman Brothers Holdings Inc. The expected dividend of 80 cents in the dollar is likely to provide significant relief to the 72 major investors in financial products, many of whom had sustained losses in the 10’s of millions, including institutional investors, private wealth individuals, councils across Australia and significant charitable organisations and churches which had surplus funds invested in a range of financial products, including the collateralised debt obligations or CDOs that they acquired through LBA. This outstanding result will see a number of investors, many of whom are not-for-profits and community based organisations receive much needed funds for their operations. This settlement is an important step for investors who have been involved in this seven year-long process, which began when they purchased a number of complex financial instruments from LBA, prior to the collapse of its US parent on September 15 2008.

Read More from: eSQUIRE Global Crossings

2 days 7 hours ago

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