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ABI Journal

March 30, 2018

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.

2nd Circuit, New York, New York Southern District

March 29, 2018

State Law, Not Filing Date, Governs Distributions to Co-Owners, Fifth Circuit Says

The distributive share to co-owners is not fixed as of the filing date under Section 363(j).

5th Circuit

March 28, 2018

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.

2nd Circuit, New York, New York Southern District

March 27, 2018

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.

2nd Circuit, New York, New York Southern District

March 23, 2018

‘Snarky’ or Factually Incorrect Emails Are Not Grounds for Rule 9011 Sanctions

Neither oral statements nor emails are sanctionable under Rule 9011, Judge Pappas says.

9th Circuit, Idaho

March 21, 2018

Federal Common Law of Constructive Trust Works When State Law Won’t

Delaware judge shows sympathy for a creditor being stiffed by the debtor.

3rd Circuit, Delaware

March 20, 2018

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.

2nd Circuit, New York, New York Southern District

March 16, 2018

Judge Harner Pens a Primer on the Elements of an Executory Contract

Unperformed obligations must be ‘material’ for a contract to be executory.

4th Circuit, Maryland

March 12, 2018

‘Local vs. National’ Rate Controversy Reemerges in a Catholic Diocese Reorganization

Montana judge cuts committee counsel’s interim allowance to rates charged by debtor’s counsel.

9th Circuit, Montana

March 09, 2018

Second Circuit Bars Arbitration in a Class Action for Violating the Discharge Injunction

New case seems inconsistent with Second Circuit’s prior opinion compelling arbitration over an automatic stay violation.

2nd Circuit