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Florida Proves Safe Haven for Individuals Liable for Breach of the PACA Trust (bonus: form complaint attached)

Editors’ Note:  For those of you who like to get something you can use from blog posts, attached here is a Form PACA Nondischargeability Complaint for a PACA seller against a party that controlled a PACA buyer, where such controlling party later files for bankruptcy.  Although, in light of the case discussed below, there is an open legal question of whether violations of the PACA trust by an individual in control of a PACA buyer result in a non-dischargeable debt under Section 523(a)(4) of the Bankruptcy Code.  To see some of our other coverage of PACA issues, a personal favorite of Leah’s and Mark’s, see here and here.

In Coosemans Miami v. Arthur (In re Arthur), the Bankruptcy Court for the Southern District of Florida held last week that individuals in control of a PACA trust may still receive a bankruptcy discharge of debts arising from their breach

Singularis v Daiwa: UK banks beware!

Editors’ Note:  The Global Restructuring and Insolvency Developments team of BCLP presents this very concerning opinion for any financial institution that operates in the United Kingdom.  Specifically, in Singularis Holdings Ltd (in Official Liquidation) v Daiwa Capital Markets Europe Ltd (copy of the ruling is here), the Court of Appeal (England and Wales) considered a bank’s duty, commonly known as a Quincecare duty, to protect companies from fraud by authorised officers.  Robin Ganguly and Alexandra Kirby of Bryan Cave Leighton Paisner’s London office present the GRID readers with a summary and the key takeaways of this ruling.

Key points

  • Banks (and other financial institutions) have a duty to protect companies from fraud by authorised officers although the extent of the duty will depend upon the services being provided.
  • An objective test needs to be satisfied as to whether there were reasonable grounds for the

Killjoy Bankruptcy Court Denies Debtors’ Motion to Buy Totally Boss Camaro

July 26, 2018

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Weird things happen in bankruptcy court. All you high-falutin Chapter 11 jokers out there, cruise down to the bankruptcy motions calendar one day.  You will see sovereign citizen arguments, the increasing problem of unprepared pro se claimants relying on bogus bankruptcy petition preparers, and occasionally, the subject of this post – Chapter 13 debtors seeking court authority to buy a sweet Camaro.

 

Debtors’ Counsel:  Your Honor, it has 20 inch rims!

The Court:  But is it an IROC?

 

 

 

 

In In re Jordan, the Bankruptcy Court for the Eastern District of North Carolina addressed a way righteous motion by Chapter 13 debtors to purchase a Camaro.  Not just any Camaro, but

From Across the Pond: The BHS Saga Continues – Can a Company Voluntary Arrangement (CVA) Ever Permanently Vary the Terms of a Lease?

Editors’ Note:  The upcoming merger between Berwin Leighton Paisner and Bryan Cave will create a 1500 lawyer, fully integrated firm with best-in-class offices in the US, UK, Europe, Russia, Hong Kong, and the UAE.  The combined Firm, to be known as Bryan Cave Leighton Paisner LLP, will have particular strengths in real estate, financial services, litigation, and corporate practices.  Most importantly for followers of The Bankruptcy Cave, this merger will result in a cadre of restructuring professionals able to handle insolvency matters around the globe, with proven expertise in cross-border workouts, restructurings, and any other insolvency featuring international flavors.  We look forward to speaking with you any time on any insolvency matter that includes any cross-border implications.  

Article summary:

In Wright (and another) (as joint liquidators of SHB Realisations Ltd (formerly BHS Ltd) (in liquidation)) v Prudential Assurance Company Ltd, the court held that, when the BHS CVA terminated, the landlord was entitled to claim the full

In Case You Missed It – PACA Trust Rights in Bankruptcy are Just Plain Old Secured Claims

Happy 2018!  We at The Bankruptcy Cave have been itching to write about the Cherry Growers Chapter 11 case – which really is ground-breaking – but the holidays, life, and yes, work for clients too, all just got in the way.  But with each passing week, the case stayed on our minds.  So now that time permits, here is the writeup – and see below for the remarkable significance of the case.

In re Cherry Growers (now reported at 576 B.R. 569, Bankr. W.D. Mich. 2017), is a garden-variety produce-related bankruptcy case.  (Ha ha, “garden-variety” produce, get it?)  The Debtor bought produce and sold it to others, in addition to conducting other food distribution activities.  When the Debtor filed for bankruptcy, there was the typical push-and-pull between a lender secured by the Debtor’s inventory and a/r, and a supplier claiming a trust interest in those same assets, protected by the

Second Circuit: Market Rate Preferred Over Formula Rate For Purposes of Secured Creditor Cramdown in Chapter 11 Issues

Courts and professionals have wrestled for years with the appropriate approach to use in setting the interest rate when a debtor imposes a chapter 11 plan on a secured creditor and pays the creditor the value of its collateral through deferred payments under section 1129(b)(2)(A)(i)(II) of the Bankruptcy Code.  Secured lenders gained a major victory on October 20, 2017, when the Second Circuit Court of Appeals concluded that a market rate of interest is preferred to a so-called “formula approach” in chapter 11, when an efficient market exists.  In re MPM Silicones (Momentive), LLC, 2017 WL 4700314 (2d Cir. Oct. 20, 2017).

In Momentive, the bankruptcy court categorically dismissed expert testimony presented by the lenders to demonstrate a market rate of 5-6+%.  Because the debtor had offered to cash out the lenders (and prepared to borrow the funds necessary to do it), there was direct evidence of the

BC Healthcare Restructuring Update: R CSR’s O-U-T? Less U.S. Gov’t $$ = More 11s . . . ?

Ok, if your attention span is anything like ours, all this wonky stuff about the ins and outs of the Affordable Care Act (or “ObamaCare,” as most of us know it) causes your eyes to glaze over and makes your mind wander to simpler topics, like who will win Dancing with the Stars, whether the Will & Grace reboot can make it, or how Luke may soon be revealed as the most evil Jedi of all.

But trust us, faithful reader, and you can, in about three short minutes, become a whiz on last week’s latest change to ObamaCare, which we think will lead to a lot more healthcare-related restructuring activity. So here is the 411 on last week’s termination of ObamaCare’s so-called “CSR Subsidies,” and its impact on our precarious, bankruptcy-prone, healthcare marketplace.  All presented to you in easy-to-follow FAQs!

It’s Not Final, and That’s Final: The Ninth Circuit’s Gugliuzza Decision

appellate court concept with gavel. 3D rendering

As we have noted in another post, Non-Final Finality: Does One Interlocutory Issue Resolved in a Bankruptcy Court Order Render All Issues Addressed in the Order Non-Appealable?, not all orders in bankruptcy cases are immediately appealable as a matter of right.  Only those orders deemed sufficiently “final” may be appealed without additional court authorization.  See 28 U.S.C. § 158(a)(3) (interlocutory order may be appealed only with leave of the court).  Appeals from “final” bankruptcy-court orders usually are first heard by a United States district court or a bankruptcy appellate panel (a “BAP”), which have jurisdiction “to hear appeals from final judgments, orders, and decrees” from bankruptcy courts.  Id. § 158(a)(1).

What happens when a district court or a BAP properly exercises appellate jurisdiction over a bankruptcy court’s

Bankruptcy Bulletin Blamed for Blabbing Bondholders; New York Court Appoints Itself Arbiter of Who is “Legitimate Media”

world_war_II-talking_poster_1942We are all very used to (and very bored of) the on-going debate of what actually constitutes “the media” or “legitimate news.”  In most instances, this sort of debate pits exclusive, Columbia-educated, “proper” journalists against those who have large on-line followings and eschew any association with a Dickensian-era newspaper.  Or, as one story recently summarized it, “Corporate Media Freaks Out at Possibility of Breitbart, Infowars Being Allowed to Ask Questions [in White House Press Conferences],” full story here.

This debate has now, surprisingly, found its way into our arcane little bankruptcy world, with Murray Energy Corporation v. Reorg Research, Inc., 2017 NY Slip Op. 27036 (N.Y. County Sup. Ct., Feb. 14, 2017) (Edmead, J.).  It started with a distressed company called Murray Energy establishing an on-line “data

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