In the well-known children’s story book written by P.D. Eastman and edited by beloved Dr. Seuss, a baby bird embarks on a quest to find his mother, asking a hen, a dog, and a kitten, among others, the famous question, “Are you my mother?”   If Dr. Seuss had penned the recently-decided case of Thielman v. MF Global Holdings, Ltd. (In re MF Global Holdings Ltd.), he might have called it, “Are You My Employer?” and its plot would have centered around the WARN Act plaintiffs’ efforts to convince the court that the MF Global enterprise, collectively, was the plaintiffs’ mother ahem employer. Just as the baby bird in Are You My Mother was faced with a journey before he could meet his mother, so too did the plaintiffs in MF Global Holdings embark on a journey of sorts—meeting the bankruptcy court and then the Southern District of New York along the way —before finding out that maybe in, some instances, it’s not necessary to know exactly who your mother, ahem employer, is.  Continue reading >>

No Protection in Ponzi Schemes: Utah Bankruptcy Court Limits Investors’ Ability to Retain Returns on Investments

October 21, 2014

Although the bankruptcy world has long been acquainted with Ponzi schemes, the courts have not clearly answered the question of how to distribute investors’ funds after a scheme fails – especially in the scenario where certain investors profit. The United States Bankruptcy Court for the District of Utah recently weighed in on the issue in Gillman […]

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Almost Favored – Court Denies Settling Defendants’ Attempt to Recover Under Most Favored Nations Clause

October 20, 2014

Being one of the first defendants to settle claims has its pros and cons. On the one hand, defendants may avoid protracted litigation. On the other hand, future defendants may ultimately negotiate lower settlement amounts. To avoid “leaving money on the table,” defendants who settle early may seek to include an equal treatment provision, or […]

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Can You Inadvertently Waive Your Automatic Stay Rights Goodbye?

October 17, 2014

As a general rule, bankruptcy courts do not enforce provisions in organizational documents, loan agreements, or other prepetition contracts that purport to alter or waive the protections of the Bankruptcy Code. As with most rules, however, there are exceptions. We have previously discussed, for example, provisions that waive the borrower’s right to seek bankruptcy protection […]

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A Comity of (Reversible) Error: Second Circuit Finds Foreign Debtor’s Claim Against U.S. Debtor Is “Located” in the United States

October 16, 2014

The ability of a foreign debtor to avail itself of the protections of the Bankruptcy Code, such as the automatic stay, with respect to its property located within the United States is one of the most fundamental and valuable tools available to foreign debtors with domestically located property. When a foreign debtor obtains “recognition” of […]

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Post-Filing Interest in a CCAA Proceeding: Re Nortel Networks Corp.

October 15, 2014

NORTH OF THE BORDER UPDATE This article has been contributed to the blog by Ziyi Shi. Ziyi Shi is an associate cross-appointed to the Corporate Group and the Insolvency Group of Osler, Hoskin & Harcourt LLP. In lengthy insolvency proceedings, interest accrued on existing claims during the “post-filing” period can represent a substantial portion of […]

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Major Banks Take Action to Facilitate Cross-Border Resolution Efforts by Agreeing to Sign ISDA Resolution Stay Protocol

October 14, 2014

This past Saturday, October 11, 2014, marked an important day in the too-big-too-fail regulatory and industry initiative. The International Swaps and Derivatives Association, Inc. (ISDA) announced on Saturday that 18 major global banks (G-18) have agreed to sign a new ISDA Resolution Stay Protocol, developed in coordination with the Financial Stability Board, to support cross-border […]

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