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. Sales of property of the estate outside of the ordinary course may be conducted pursuant to §363 of the Bankruptcy Code, as well as pursuant to a plan of reorganization.
Many secured lenders do not realize the risks associated with lending upon collateral involving underground storage tanks (USTs). Whereas the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (CERCLA), was amended years ago to protect and insulate from liability lenders who foreclose on environmentally-tainted collateral, USTs are governed by the Resource Conservation and Recovery Act of 1976, as amended (RCRA).
In a recent decision that caught the attention of many in the secured lending community, the U.S.
The recent decision of Hon. Arthur J. Gonzalez in the chapter 11 cases of Chrysler LLC and its affiliated debtors recalls the oft-repeated maxim "be careful what you wish for." In re Chrysler LLC, et al., Case No. 09-50002 (AJG) (Bankr. S.D.N.Y. April 30, 2009). In the context of syndicated lending, lenders have "wished for" and contracted to enter into intercreditor agreements that appoint a single agent to act on behalf of the syndicate, usually subject to the consent of holders of a specified percentage of syndicated loans.
"So, I say to myself, Self, things could be worse. And, sure enough!"
Don't blame the home mortgage mess on the Bankruptcy Code.
Section 11 USC 109 excludes insurance companies and "lending institutions" from title 11. Why? Because it is regulated under some other state and/or federal law.
In an effort to protect suppliers who sell goods in the days leading up to a customer's bankruptcy, Congress has, via §503(b)(9) of the Bankruptcy Code, carved out special treatment for claims made by creditors who sell and deliver goods to a debtor during the 20 days before a debtor's filing.
For the past year or so, regulators and investors have been eyeing the subprime-mortgage industry as spectators on an expressway might a fender bender or a flat tire. Although onlookers usually don’t know what they’re slowing down to see, it’s more often than not a harmless event, rather than a major catastrophe. Nonetheless, the viewing continues, and so do the endless commutes.
Confidentiality matters in regards to hedge funds. As increasing numbers of funds compete for investment opportunities, it becomes even more critical for fund managers to keep their holdings and investment strategies close to the vest. Hedge funds that focus on distressed investments have become more active participants in bankruptcy proceedings, but remain loath to disclose sensitive information about the precise nature of their holdings.