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2nd Circuit

Chapter 15 Allows Discovery Not Available under Foreign Law, New York Judge Says

Bankruptcy Judge Shelley C. Chapman skirts an arbitration agreement to allow discovery.

Non-Consensual Third-Party Releases Pass Muster in Chapter 15

Principles of comity justify enforcing a U.K. scheme of arrangement that releases non-filed affiliates’ guarantees.

Debtor Successfully Claims an Exemption 19 Years after Discharge

Law v. Siegel allows exempting an asset that had not been scheduled.

Structured Finance Protects Tuition Payments from Fraudulent Transfer Suits

Children were the initial transferees of tuition payments, thus giving schools the ‘good faith’ defense to fraudulent transfers.

Not a ‘Mechanical Rule,’ Judicial Estoppel Requires Benefit, Second Circuit Says

Judicial estoppel requires ‘an effort to game the bankruptcy system.’
Court: 

District Court Endorses Opt-Out to Confirm Substantive Consolidation Plans

Augie/Restivo problems are avoided by including opt-out provisions in a substantive consolidation chapter 11 plan.

Madoff Opinions Ease Pleading Requirements in Suits Against Subsequent Transferees

Bankruptcy Judge Vyskocil holds that alter ego need not be alleged to recover from a corporation’s sole shareholder as the beneficiary of a fraudulent transfer.

SIPA Bars General Unsecured Claims for Failure to Transfer Accounts Before Filing

The trustee for a bankrupt broker can ignore an individual customer’s request to transfer securities to a solvent broker and may instead transfer customer accounts in bulk.

Court May Depart from the Code When the Debtor Consents and No One Objects

Unique facts were again the basis for a result seemingly at odds with the statute.

Flip Clauses in Swaps Held Enforceable by District Judge in New York

For swaps, the Section 560 safe harbor overrides the anti-ipso facto provisions in the Bankruptcy Code.

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