Help Center

ABI Blog Exchange

In a 5 page opinion released January 21, 2016 in the Trump Entertainment Resorts case (Bank. D. Del. 14-12103), Judge Kevin Gross of the Delaware Bankruptcy Court denied the motion of Unite Here Health (“UHH”), the health care provider to employees who were members of union, Unite Here Local 54 (the “Union”).  Judge Gross’s opinion is available here (the “Opinion”).  Judge Gross has issued a number of opinions in this bankruptcy, and we have published several posts about the issues which have been decided.  Please review our prior posts for the background of the dispute between the Union and the Debtors: Trump Entertainment Resorts Files for Chapter 11 Bankruptcy Protection in Delaware Trump Entertainment – A Debtor’s Rejection of a Bargaining Agreement Third Circuit Affirms Bankruptcy Opinion – Trump Entertainment
2 weeks 2 days ago
The combination of falling stock prices, higher-risk strategies and signs of worsening credit quality does not bode well for the industry's road ahead.

Read More from: BankThink

2 weeks 2 days ago
The co-debtor stay applies in chapter 13 of the United States Bankruptcy Code and goes into effect immediately upon the filing of the case. The co-debtor stay will prohibit any action or continued action to collect on a consumer debt from an individual who secured such debt or who is liable on such debt with+ Read More The post Co-Debtor Stay In Bankruptcy appeared first on David M. Siegel.
2 weeks 3 days ago
Recently, in SEC v. Miller, No. 14-4261-cv (2d Cir. Dec. 18, 2015), the Second Circuit held, among other things, that a postpetition asset freeze order did not violate the automatic stay.  Now, I know what you’re thinking: “What!  That’s nuts!”  But, read on bankruptcy folks.  It’s not as Wyly’d as you may think.  Remember, the all-encompassing automatic stay is not without its limits.   In Miller, the SEC brought a civil enforcement action against Samuel Wyly and Charles Wyly, Jr. (brothers), asserting multiple claims of securities fraud.  The Wyly brothers were officers, directors, and shareholders of four publicly traded corporations.  In the early 1990s, the Wyly brothers transferred millions of stock options received from those corporations to offshore trusts and subsidiaries in the Isle of Man (a self-governing British Crown dependency in the Irish Sea). The trusts exercised those options and traded in the securities while the brothers failed to disclose their beneficial ownership, returning profits of more than $550 million.
2 weeks 3 days ago
Shareholders at several companies will vote on proposals asking boards to adopt a payout policy that gives preference to share repurchases instead of cash dividends. The proponents' supporting statement extolled the advantages of repurchases as more flexible than dividends and indicated some concern that dividends automatically caused a tax liability for some shareholders.
2 weeks 3 days ago
Banks that prioritize structural changes in their compliance process will make risk frameworks more effective and sustainable over time.

Read More from: BankThink

2 weeks 3 days ago
Receiving Wide Coverage ... AIG's Restructuring Examined: American Insurance Group released its plans Tuesday for a corporate restructuring aimed at appeasing restless investors, but already critics have begun to poke holes in the plan. The insurer plans to separate its company into nine units that can be spun off at any time. It plans an initial public offering for its mortgage insurance unit and decided to create a legacy portfolio for non-strategic assets in a mannerÂ...

Read More from: BankThink

2 weeks 3 days ago
Samson Resources Corp.’s interim chief executive is stepping down next month, Daily Bankruptcy Review reports via The Wall Street Journal. (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.”) According to WSJ, Puerto Rico plans to hold debt-restructuring talks on Friday. Residents of Atlantic City, N.J., are angry and frustrated at New Jersey Gov. Chris Christie’s proposal for a state takeover of the struggling city, WSJ reports. Mr. Christie said he isn’t looking at bankruptcy, and the city’s financial problems are also a political issue in the GOP presidential race.

Read More from: WSJ.com: Bankruptcy Beat

2 weeks 3 days ago
New Products Corp. v. Tibble (In Re Modern Plastics Corp.), 534 B.R. 723 (Bankr. W.D. Mich. 2015) – The assignee of a mortgage lender sued a former Chapter 7 trustee and his surety for claims based on breach of fiduciary duty. … Continue reading →
2 weeks 3 days ago
Joel R. Spivack was recently named a South Jersey Magazine “Awesome Attorney” for 2015. Each year, South Jersey Magazine readers choose the state’s most outstanding lawyers. This year, Joel Spivack has been named one of New Jersey’s 152 top attorneys. This is just one of many honors that Mr. Spivack has achieved over the course of his distinguished legal career. He was previously named one of the Top Bankruptcy Attorneys in Southern New Jersey by South Jersey Magazine. Mr. Spivack has also served as a commentator and panelist on “Legal Line,” a WPSJ and Garden State Television program. Mr. Spivack has dedicated his practice to assisting clients with bankruptcy and real estate matters in South Jersey and Philadelphia. He understands the importance of maintaining good credit, especially because a poor credit rating can cause serious problems down the road. If you are looking to buy or rent a home in the future, your past could quickly catch up with you. That’s why it is imperative that you consult with a qualified bankruptcy and debt management attorney before making any final decisions about whether to file for bankruptcy.
2 weeks 3 days ago
In the absence of congressional action on housing finance reform, here is what the Federal Housing Finance Agency should do sooner rather than later.

Read More from: BankThink

2 weeks 3 days ago
Nuo Therapeutics, Inc. (NUOT.PK), a biomedical company, has commenced a case (Case No. 16-10192) under Chapter 11 of the Bankruptcy Code by filing a petition with the U.S. Bankruptcy Court for the District of Delaware.  The debtor’s petition is available here, and additional documents are available from the Court’s website.  The company states in a press release that it intends to sell substantially all of its assets. Contact Norman L. Pernick, Nicholas J. Brannick, or David W. Giattino for more information.
2 weeks 3 days ago
Yesterday’s post discussed the recent appellate ruling in Sentinel’s bankruptcy, Grede v. Bank of New York Mellon Corp. (In re Sentinel Management Group, Inc.), and, specifically, the Seventh Circuit’s finding that Bank of New York Mellon (“BNY”) was on inquiry notice that the assets Sentinel had used to secure the bank’s loans had been fraudulently conveyed to the bank and that a reasonably diligent inquiry would have uncovered the fraud.  Thus, the court ruled that BNY could not avail itself of a good faith transferee defense to the liquidating trustee’s fraudulent transfer claim.  As a result of this ruling, BNY is an unsecured creditor of Sentinel’s estate.  The second question that the court resolved was whether the court should lower the priority of BNY’s unsecured claim through application of the doctrine of equitable subordination.  This second question is the focus of today’s post.  Background
2 weeks 3 days ago
Lenders and secured creditors often require that debtor-customers direct all receivable collections into a lockbox, hoping to wrangle any available proceeds to apply to their debtors’ outstanding debt. In requiring a debtor or its customer to remit payments to a lockbox, however, creditors may be overlooking a potential source of significant liability. A creditor using a lockbox may unwittingly expose itself to greater risk and liability than just a debtor’s default if it receives funds that were collected as sales tax on a debtor’s goods or services. As a lender or secured creditor, how do you know if you are at risk? First and foremost, understand your debtor’s business and whether its goods or services are taxed. Second, know what the laws provide for in the jurisdiction where your debtor is conducting business – particularly with respect to third-parties that collect or receive sales tax. By way of example, the State of Texas treats anyone who collects or receives money that is collected as a tax as a strict, statutory trustee, holding the collected tax for the benefit of the taxing authority. Recipients and holders of such proceeds may be liable for the full tax amount collected – plus any accrued interest and penalties. See Tex. Tax Code Ann. § 111.016 (2007).
2 weeks 4 days ago
Are “electronic document” provisions appearing in your commercial loan documents?  This is the second in a series examining two provisions recently reviewed by me in commercial real estate transactions.   Unfortunately, the two provisions have serious problems: for UCC Article 3 notes, making a copy of it will not clothe the copy with Article 3 protections. Copy & Trash the Original Note: No No & No Electronic documents are not a passing fad:  the growing use of eSign tells me that the bank examination “report card” in 2016 or 2017 will include the use of electronic documents by banks.  This topic is not going away.  We will see more of these provisions, even in commercial loan documents.

Read More from: Tough Times for Lenders

2 weeks 4 days ago
The question presented to the Supreme Court in Husky Int’l v. Ritz is so bizarre, I just had to dig deeper. The question is whether the exception to discharge in section 523(a)(2)(A) for debts arising from “actual fraud” requires a showing that the debtor’s fraud involved a false representation. Note immediately that section 523(a)(2)(A) excepts from discharge debts arising from “false pretenses, a false representation, OR actual fraud” (emphasis added). This seems like such a simple statutory interpretation exercise (do you see the “OR” sitting there?!), I figured I must be missing something in thinking that the whole dispute is one step shy of contrived. After looking more closely, I still think the Fifth Circuit has run completely off the rails with this one … unless I’m totally missing something here. I’d be grateful if anyone can disabuse me of my ignorance; otherwise, it seems the Supreme Court must have granted certiorari simply to fix an obvious and egregious error that no one but the Supreme Court can fix.

Read More from: Credit Slips

2 weeks 4 days ago
Authored by Adam B. BrandonTo establish standing to enforce a promissory note, a lender must prove that it is the rightful holder of the negotiable instrument. Typically, this entails producing the original note together with all allonges endorsing the note to subsequent holders. Under Florida’s Uniform Commercial Code (“UCC”), an allonge must be “affixed” to the note such that it becomes part of the instrument itself.[1] This requirement prevents fraud and preserves the chain of title. Borrowers frequently challenge the validity of allonges when it is unclear whether an allonge was stapled or otherwise firmly affixed to a note. However, the Fourth District Court of Appeal recently clarified, for the first time, that an allonge need not be physically attached to an instrument to satisfy the UCC. In Purificato v. Nationstar Mortgage, LLC, the lender established standing by entering the original promissory note and allonge into evidence. The allonge identified the borrowers, the loan number, and the original date and amount of the loan. The lender also introduced a computer screen shot showing that the lender stored both the note and allonge in its records as a single electronic document. However, the lender offered no evidence that the allonge was physically affixed to the note prior to litigation.

Read More from: Florida Banking Law Blog

2 weeks 4 days ago
Hypo Group Alpe Adria AG, an Austrian banking group, was nationalized by the Austrian government in 2009 in order to avert a bank collapse. The Austrian province of Carinthia owned the bank until 2007 and the guarantees given by Carinthia for the bank’s debt still amount to several times its annual budget, which has made the winding-down process more complicated because sharing the losses with bondholders would lead to significant claims against Carinthia. See German Creditors Challenge failure of Austrian Hypo-Alpe-Adria Bank for more background.

Read More from: eSQUIRE Global Crossings

2 weeks 4 days ago
Verso Corporation (VRSZ, OTC), a producer of printing papers, specialty papers and pulp, and 26 affiliated debtors have filed chapter 11 petitions before the United States Bankruptcy Court for the District of Delaware (lead case number 16-10163).  The cases have been assigned to the Honorable Kevin Gross.  The voluntary petition (including the consolidated list of top 30 creditors), and the docket are available through Prime Clerk.  The debtors have issued a press release discussing their restructuring plans. Contact Norman L. Pernick, Nicholas J. Brannick, or David W. Giattino for more information.
2 weeks 4 days ago
Many people in the Birmingham area have watched the Walter Energy case with great interest because they work for or know someone who has a connection to Walter Energy. The court’s most recent opinion will allow the company to reject its labor agreements and end retiree benefits. This, the company said, was needed to sell off its operations.  Shortly after the Bankruptcy Court’s opinion, I received a call from one of our clients who is being laid off from his job at Walter Energy. As one can well imagine, he is very concerned about the how this will affect his chapter 13 case. I am optimistic that he will find new employment such that he will be able to continue making his chapter 13 payments. Another option may be to ask the court for a temporary suspension of his payments until he obtains new employment and can resume his payments to his creditors. Hillary Clinton Condemns Walter Energy

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

2 weeks 4 days ago

Pages