SUPREME COURT RULES IN FAVOR OF CREDIT-BIDDING IN THE RADLAX CASE
The U.S. Supreme Court ruled today that a secured creditor cannot be denied the right to credit-bid involving the sale of property or other assets as part of a bankruptcy reorganization plan, Reuters reported. The justices unanimously affirmed a Seventh Circuit decision and decided the issue after some lower courts (notably the Third Circuit) in recent years confirmed chapter 11 plans that provided for the sale of assets while denying the secured creditor the right to credit-bid. Debtors argued in the RadLAX case that credit-bidding discourages third parties from participating in the auction. Creditors argued that denial of their right to credit-bid is proscribed by §1129(b)(2) of the Code. In reading the opinion from the bench, Justice Antonin Scalia wrote for the majority that, under the plain language of the statute, a debtor may not obtain confirmation of such a chapter 11 plan that provides for the sale of collateral free and clear of the bank's lien, but does not permit the bank to credit-bid at the sale. Click here to read the full opinion.
Having already examined the oral argument in a previous ABI media teleconference, panelists will reconvene for an ABI and West LegalEd Center webinar on June 26 to discuss today’s Supreme Court ruling in RadLAX Gateway Hotel LLC v. Amalgamated Bank. CLE credit will be available for the webinar, which will be held from 2:00-3:30 p.m. ET.
Experts on the program include:
• David Neff of Perkins Coie LLP (Chicago), the counsel of record for petitioner RadLAX Gateway Hotel LLC and participant in the argument.
• Jason S. Brookner of Andrews Kurth LLP (New York), whose article was cited in the brief for the respondent.
• Prof. Charles Tabb, the Alice Curtis Campbell Professor of Law at the University of Illinois College of Law, who recently published a paper titled "Credit Bidding, Security, and the Obsolescence of Chapter 11."
ABI Resident Scholar David Epstein will be the moderator for the webinar.
The webinar costs $115 and purchase provides online access for 180 days. If you are purchasing a live webcast, you will receive complimentary access to the on-demand version for 180 days once it becomes available. Click here for more information.
U.S. WINDS DOWN LONGER BENEFITS FOR THE UNEMPLOYED
Hundreds of thousands of out-of-work Americans are receiving their final unemployment checks sooner than they expected, even though Congress renewed extended benefits until the end of the year, the New York Times reported today. The checks are stopping for the people who have the most difficulty finding work: the long-term unemployed. More than five million people have been out of work for longer than half a year. Federal benefit extensions, which supplemented state funds for payments up to 99 weeks, were intended to tide over the unemployed until the job market improved. Congress renewed the program in February, when it was set to expire, but also phased in a reduction of the number of weeks of extended aid and effectively made it more difficult for states to qualify for the maximum aid. Since then, the jobless in 23 states have lost up to five months’ worth of benefits. Next month, an additional 70,000 people will lose benefits earlier than they anticipated, bringing the number of people cut off prematurely this year to close to half a million, according to the National Employment Law Project. Read more.
ANALYSIS: COLLEGE DROPOUTS HAVE DEBT, BUT NO DEGREE
As the nation amasses more than $1 trillion in student loans, education experts say that a vexing new problem has emerged: A growing number of young people have a mountain of debt but no degree to show for it, the Washington Post reported today. Nearly 30 percent of college students who took out loans dropped out of school, up from fewer than a quarter of students a decade ago, according to a recent analysis of government data by think tank Education Sector. College dropouts are also among the most likely to default on their loans, falling behind at a rate four times that of graduates. The plight of "non-completers" has grown in magnitude as student debt tops $1 trillion, according to the Consumer Financial Protection Bureau. In addition, the sputtering economy has forced a growing number of students to make difficult choices between the benefits of a degree and the burden of paying for it. More students are balancing their studies with full- or part-time jobs or signing up for a reduced course load to save money, increasing the likelihood that they will not graduate. Read more.
EUROPE TURNING TO U.S. FOR LOANS
In the latest symptom of Europe's financial turmoil, the region's riskier companies are bypassing banks and investors at home and turning to the U.S. for loans, the Wall Street Journal reported today. European companies borrowed some €14.4 billion (about $18 billion at current rates) in the U.S. leveraged-loan market this year through Friday, more than double the €6.7 billion for all of 2011, according to data from S&P Capital IQ LCD. That is the highest amount since at least 2007, the height of the last boom in leveraged lending, when full-year loan volume was €12.2 billion, according to S&P. The increased demand for European debt has been driven by a dearth of high-yielding options from U.S. companies, bankers say. Read more. (Subscription required.)
ABI IN-DEPTH
JUNE 5 WEBINAR WILL EXAMINE HOW TO HANDLE AN ADMINISTRATIVELY INSOLVENT ESTATE
Panelists from one of the top-rated sessions at the 2011 Winter Leadership Conference are going to reconvene for an ABI and West LegalEd Center webinar on June 5 titled, "Handling the Administratively Insolvent Estate- What to Do When Your Chapter 11 Goes South." CLE credit will be available for the webinar, which will last from 11 a.m. - 12:30 p.m. ET.
Speakers include:
• Robert J. Feinstein of Pachulski Stang Ziehl & Jones LLP (New York)
• Cathy Rae Hershcopf of Cooley LLP (New York)
• Robert L. LeHane of Kelley Drye & Warren LLP (New York)
Robert J. Keach of Bernstein Shur (Portland, Maine) will be the moderator for the webinar.
The webinar costs $115, and purchase provides online access for 180 days. If you are purchasing a live webcast, you will receive complimentary access to the on-demand version for 180 days once it becomes available. Click here for more information.
LATEST CASE SUMMARY ON VOLO: GRUBER V. KAPLAN (IN RE KAPLAN; 3D CIR.)
Summarized by Julia Klein of The Rosner Law Group LLC
The Third Circuit affirmed the district court's order upholding the decision of the bankruptcy court denying the appellant's motion under Fed. R. Bankr. P. 8002(c) to extend the time to appeal and agreed with the district court's determination that appellant's due-process right to notice had not been violated.
More than 500 appellate opinions are summarized on Volo typically within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.
NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: FURTHER INSIGHT ON THE DEWEY & LEBOEUF FILING
The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post further examines the chapter 11 filing yesterday of law firm Dewey & LeBoeuf LLP.
Be sure to check the site several times each day; any time a contributing blog posts a new story, a link to the story will appear on the top. If you have a blog that deals with bankruptcy, or know of a good blog that should be part of the Bankruptcy Exchange, please contact the ABI Web team.
ABI Quick Poll The few “net winners” in a bankrupt Ponzi scheme should be required to turn over to the trustee any returns in excess of their original investment (with no special defenses or exceptions), to be distributed to the many “net losers” victimized by the scheme.Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.
INSOL INTERNATIONAL
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