Let’s Call the Whole Thing Off: What Happens if the Bankruptcy Code Says Yes, But the Debtor’s Governance Documents Say No?

August 20, 2014

As a general matter, governance provisions in a chapter 11 debtor’s organizational documents continue to apply postpetition.  But what if those governance provisions prevent the debtor from engaging in an act expressly authorized by the Bankruptcy Code?  This issue was recently addressed by the United States Bankruptcy Court for the Southern District of Florida in […]

Read the full article →

Can the FDIC Assert Direct as Well as Derivative Claims of Stockholders of Failed Banks? The Seventh Circuit Says “No (But Maybe They Should)”

August 19, 2014

In Levin v. Miller, a recent decision out of the Seventh Circuit, Judge Easterbrook clarified the types of claims that the Federal Deposit Insurance Corporation may assert under section 1821(d)(2)(A)(i) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 after it takes over a failed bank.  Section 1821(d)(2)(A)(i) grants the FDIC “all rights, […]

Read the full article →

CCAA Court Modifies a Claims Procedure Order and Allows a Stay to Be Lifted for A Proposed Class Action Claim to be Pursued After the Claims-Bar Date

August 18, 2014

NORTH OF THE BORDER UPDATE This article has been contributed to the blog by Edward Sellers and Joshua Hurwitz. Edward Sellers is a partner in the Insolvency & Restructuring group and Joshua Hurwitz is an associate in the Insolvency & Restructuring group at Osler, Hoskin & Harcourt. Introduction The Ontario Superior Court of Justice lifted […]

Read the full article →

Keeping Up with the Joneses: Our Top Five Most Read Posts this Year

August 15, 2014

We know we’re competing with news on Puerto Rico, Detroit, Syria, Iraq and other lovely places to spend your summer holidays, and that the deluge of daily updates means that you just can’t manage to read all of those wonderful Bankruptcy Blog posts that hit your inbox every day. Fear not: we’ve got your back.

Read the full article →

Peering Through the Muck Again: Another Court Analyzes Whether LLC Operating Agreements are Property Interests or Executory Contracts

August 14, 2014

We’ve previously focused here and here on the split in authority analyzing whether provisions in LLC operating agreements that automatically strip members of their membership interests upon a bankruptcy filing are unenforceable ipso facto provisions.  Whether an LLC operating agreement is viewed by the court as property of the debtor’s estate or an executory contract […]

Read the full article →

The Ninth Circuit Waits for No One

August 13, 2014

“If ye continue in the faith grounded and settled, and be not moved away from the hope of [EBIA v. Arkison]. . .” – Colossians 1:23, King James version (as revised) Earlier this year, we at the Stern Files expressed our disappointment with the Supreme Court’s limited decision in Executive Benefits Insurance Agency v. Arkison […]

Read the full article →

Pass the Buck: Fourth Circuit Preserves the Mere Conduit Defense

August 12, 2014

Banks, insurance brokers, and other agents can breathe a sigh of relief as the Fourth Circuit enabled the “mere conduit” defense to survive another day. The Fourth Circuit has long recognized the proposition that an avoidable transfer cannot be recovered, pursuant to section 550(a)(1) of the Bankruptcy Code, from a transferee who acted as a […]

Read the full article →