With the economy still lagging and an apparent end to federal assistance for state and local governments, some experts are predicting an increase in chapter 9 bankruptcy filings. Chapter 9 of the Bankruptcy Code provides a rarely used avenue for municipalities and other political subdivisions to obtain relief from creditors.
![Photo of David M. Hillman [1]](https://abi-org-corp.s3.amazonaws.com/committee/Authors/Hillman.jpg)
In In re Boston Generating LLC, a New York bankruptcy judge held that second-lien lenders could object to a debtor’s bid procedures approved by the first-lien lenders despite the terms of an intercreditor agreement. [2] The intercreditor agreement provided the first-lien lenders with the “exclusive right to…make determinations r
In September 2009, the Third Circuit issued a ruling in Wawel Savings Bank v. Jersey Tractor Trailer Training Inc. (In re Jersey Tractor Trailer Training Inc.), 580 F.3d 147 (3d Cir. 2009), that addressed significant issues that can arise in situations where competing claims to a debtor’s accounts receivable exist between a traditional lender and a factor.
The Second Circuit Court of Appeals held on Nov. 5, 2009, that a creditor was entitled to its postpetition legal fees incurred on a prepetition indemnity agreement. In affirming the lower courts, the Second Circuit explained that the Bankruptcy Code “interposes no bar to recovery.”[1]
In In re Crescent Oil Company, et al., Case No. 09-20258, pending in the U.S. Bankruptcy Court for the District of Kansas, the court entered an order approving a gifting carve-out that could provide a road map for some undersecured lenders in their dealings with unsecured creditors’ committees.
Credit bidding, which has been used with increasing frequency as a tool for secured creditors to obtain possession of their collateral rather than receive the proceeds of a sale for consideration they view as inadequate, allows a secured creditor to set off sums owed to such secured creditor as a bid in certain sales of property of a debtor’s estate.
Many secured lenders do not realize the risks associated with lending upon collateral involving underground storage tanks (USTs).
In a recent decision that caught the attention of many in the secured lending community, the U.S.