BCLP Global Restructuring & Insolvency Developments

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From Across the Pond – Dissipation of Assets May be Tort Under English Law: Marex Financial Limited v. Garcia [2017] EWHC918

Editor’s Note from The Bankruptcy Cave:  Our good colleagues Robert Dougans and Tatyana Talyanskaya from BC’s London office published this earlier in the summer, and we could not wait to add it to your autumn reading list.  The lesson here is powerful – England, the birthplace of the common law, comes through again to right an injustice where traditional legal principles might otherwise fall short.  Many of you readers have often dealt with defendants playing a shell game with their assets.  The Marex decision provides a powerful response – an independent tort against the individuals who perpetrated the asset stripping, instead of a pursuing a daisy-chain of subsidiaries and affiliates, all bereft of assets.  We at The Bankruptcy Cave applaud this decision – for every right, there shall be a remedy! 

There is a joke that freezing injunctions are

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!

No Notice: How Unnotified Creditors Can Violate a Discharge Injunction

Here is the scenario: You are a creditor.  You hold clear evidence of a debt that is not disputed by the borrower, an individual.  That evidence of debt could be in the form of a note, credit agreement or simply an invoice.  You originated the debt, or perhaps instead it was transferred to you — it does not matter for this scenario.  At some point the borrower fails to pay on the debt when due.  For whatever reason, months or even years pass before you initiate collection efforts.

Finally, you seek to collect on the unpaid debt. Those collection efforts include letters and phone calls, and maybe even personal contact, all of which are ignored.  Then you employ an investigator and an attorney.  You eventually obtain a default judgment from a state court, which the borrower (unsurprisingly) refuses to pay.  You then garnish the borrower’s wages to pay the debt.  You

The Jevic Files Continue: Pioneer-ing the Post-Jevic Era, and Wondering if Jevic Altered Critical Vendor Theory After All?

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Editors’ Note:  The Supreme Court’s Jevic ruling last spring remains a treasure trove of bankruptcy theory, suitable for the novice bankruptcy student and highly instructional for those of us who have practiced in chapter 11 for years.  We at The Bankruptcy Cave like it so much that we will be offering a few more posts in upcoming weeks on the lower courts’ interpretation of Jevic since the spring, the continued efforts in Delaware to sidestep Jevic, and other important learning from the case.  Here, our co-editor Justin Morgan, practicing law just a few

Déjà Vu All Over Again: The Ninth Circuit Finds Concrete Injury in Spokeo Remand

Editor’s Note:  The Bankruptcy Cave is just about ready to return from summer vacation (which is our lame way of saying we got really busy with work for actual clients, and blogging just fell by the wayside).  But rest assured, we have a lot of great posts tee’d up for the next several weeks, and The Bankruptcy Cave looks forward to re-joining the cadre of practical, semi-academic, and occasionally critical commentators on restructuring and bankruptcy matters.  In the meantime, here is a great cross-post based on a Bryan Cave client advisory issued last week by our Bryan Cave Consumer Financial Services colleagues Eric Martin and Jonathan NicolSpokeo shows up a lot in consumer class actions, but this Supreme Court opinion is equally important to anyone dealing with FDCPA, FCRA, or other types of claims brought by a Chapter 7 debtor.   

Supreme Court Grants Cert on, of all Things, the Standard of Review for Determining Non-Statutory Insider Status

Last December, we updated you that the Supreme Court was considering whether to grant review of In re The Village at Lakeridge, LLC, 814 F.3d 993 (9th Cir. 2016). Our original post is here.  On March 27, 2017, the Supreme Court granted review of Village at Lakeridge, but only as to one question presented, the most boring one in our view.  (Seems like after giving us bankruptcy professionals a thrill with a deep, insightful, and important ruling like Jevic, the Supreme Court is going back to bankruptcy matters that range from the esoteric to the downright irrelevant; oh well.)

In The Village at Lakeridge, a non-statutory insider acquired a $2.76 million claim against the debtor from an insider for $5,000.  Id. at 997.  The debtor attempted to confirm its plan (which included a cramdown of U.S. Bank’s claim) by arguing that the assignee

Sabine: The Next Episode

April 13, 2017

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Sabine: The Next Episode

April 13, 2017

Authored by: Craig Schuenemann

Editor’s Note: On June 16, 2016, The Bankruptcy Cave gave you our previous summary of the controversial Sabine decision.  When Bankruptcy Judge Chapman determined there was no reason to expedite review of her decisions in the case, we brought you Sabine Lives On (and On) detailing the struggles of Sabine’s midstream adversaries.  Like Hollywood, Bankruptcy Cave knows that sequels sell (with some notable awful exceptions, such as here and here).  We now bring you the third installment of Sabine.  If it sounds like a horror film or slasher flick, it was for the midstream sector.

The bankruptcy court was right!  Judge Rakoff of the United States District Court for the Southern District of New York stated starkly: “[T]he bankruptcy court did not err in authorizing the rejection of the Agreements pursuant to 11 U.S.C. § 365(a).  Nordheim challenges the decision

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 order,

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 room”

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