By: Arianna Clark
St. John’s Law Student
American Bankruptcy Institute Law Review Staff
By: Nataniel Arabov
St. John’s Law Student
American Bankruptcy Institute Law Review Staff
By: Antonia Edwards
St. John’s Law Student
American Bankruptcy Institute Law Review Staff
By: Taylor Anderson
St. John’s Law Student
American Bankruptcy Institute Law Review Staff
By: Gabriella Labita
St. John’s Law Student
American Bankruptcy Institute Law Review Staff
In In Re Relativity Fashion, LLC, the United States Bankruptcy Court for the Southern District of New York held that Netflix was not permitted to stream certain films before they were theatrically released. RML Distribution Domestic, LLC, DR Productions, and Armored Car Productions, LLC (collectively, the “Debtors”) filed for bankruptcy in July 2015 and proposed a Chapter 11 plan of reorganization (the “Plan”), which contemplated the theatrical release of certain movies before Netflix streams them. The Debtors’ release of the films yielded specific financial projections and was a critical factor in the court’s determination that the Plan was feasible as required by the United States Bankruptcy Code. The Debtors petitioned the court to compel Netflix to comply with proposed amendments to Notices of Assignment that were issued under a license agreement between Netflix and the Debtors. The judge’s confirmation order of the Plan approved these amendments, dictating that the payments owed by Netflix under the license agreement were to be assigned to the lenders. Netflix conceded the amendments because the license agreement required compliance as long as the terms did not change Netflix’s rights. Netflix asserted, however, that accordingly to the license agreement it had the right to distribute the films prior to theatrical release.
By: Daniel Quinn
St. John’s Law Student
American Bankruptcy Institute Law Review Staff
In 2015, the United States Court of Appeals for the Second Circuit found that attorneys at May-er Brown, LLP had inadvertently terminated certain liens granted by General Motors (“GM”) in favor of J.P. Morgan Chase (“JPM”). GM repaid the Term Loan agreement in full in accordance with the bankruptcy court order and therefore made the retirement plaintiffs and Term Loan members subject to clawback provisions under the Bankruptcy Code. The members of the Term Loan agreement and retirement plaintiffs filed a lawsuit against Mayer Brown, the law firm responsible for the erroneous termination of liens, for negligent mis-representation and legal malpractice in the United States District Court of Northern District of Illinois.
By: Ryan Dolan
St. John’s Law Student
American Bankruptcy Institute Law Review Staff
In Ritchie Capital Structure Management Trading, LTD., v. General Electric Capital Corporation, the United States Court of Appeals for the Second Circuit held that investors in a debtor’s Ponzi scheme did not have standing to sue the debtor’s lender.
By: Amanda Tersigni
St. John’s Law Student
American Bankruptcy Institute Law Review, Staff
Section 546(e) of the Bankruptcy Code generally provides that a trustee may not avoid a “settlement payment” as a preference or a fraudulent transfer.[1] This so-called “safe harbor,” a defense to a trustee’s avoidance power, is designed to avoid uncertainty in security trading and to prevent an ultimate instability in the financial markets.[2] The United States Bankruptcy Court for the Southern District of New York in Picard v. Avellino (In re Bernard L. Madoff Inv. Sec. LLC),[3] held that having actual knowledge of fraudulent nature of a security trading precluded a defendant from using the safe harbor defense under Section 546(e).[4]
By: Michael DeRosa
St. John’s Law Student
American Bankruptcy Institute Law Review Staff
In In re AMC Investors, the Delaware district court reversed the bankruptcy court’s decision granting summary judgment in favor of the officers and directors (“Defendants”) of AMC (the “Company”) because[1] Eugenia, as the sole creditor, was granted derivative standing to file suit on behalf of the debtors of the Company.[2] Prior to being granted derivative standing, Eugenia filed involuntary Chapter 7 bankruptcy petitions against the debtors in 2009.[3] The bankruptcy court granted summary judgment in favor of the Defendants, which was based on Defendants’ statute of limitation defense.[4] Eugenia and the debtors (collectively “Plaintiffs”) appealed summary judgment.
By: Courtney Sokol
St. John’s Law Student
American Bankruptcy Institute Law Review Staff
The United States District Court for the Northern District of Alabama concluded that the Bankruptcy Court had jurisdiction and entered a valid termination of retirement benefits pursuant to Section 1114 of the Bankruptcy Code. Moreover, according to the District Court, it lacked jurisdiction to consider the Appellants' challenge to the Bankruptcy Court's ruling under Section 1113. This ruling allows Walter Energy to terminate collective bargaining agreements with retired coal miners, thus allowing the “necessary” reorganization of the debtor. This suit was an effort by the United Mine Workers of America to preserve the retirement plans of covered employees of Walter Energy, a company seeking a protection under Chapter 11 of the Bankruptcy Code. If retiree benefits were not halted the proposed purchaser, Warrior Met Coal, LLC, would not acquire Walter Energy.