Monthly Archives: March 2012

On February 28, 2012, in a case of first impression, the U.S. Court of Appeals for the Second Circuit considered which choice of law rules should apply when a bankruptcy court sitting in one state is resolving a bankruptcy claim arising from a state-law action previously filed in another state. The Second Circuit held that where (1) a claim before the bankruptcy court is wholly derived from another legal claim pending in a parallel non-bankruptcy proceeding in another state, and (2) the pending original claim was filed in a court prior to the commencement of the bankruptcy case, the bankruptcy court must apply the choice of law rules of the state where the underlying prepetition claim was filed. Statek v. Development Specialists, Inc. (In re Coudert Brothers LLP), 2012 U.S. App. LEXIS 4019 (2d Cir. 2012). Continue reading →

On February 10, 2012, Judge Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York held that certain plaintiffs alleging antitrust violations against Lear Corporation and its reorganized debtor affiliates (i) hold “claims” that are enjoined to the extent they arose before the effective date of the reorganized debtors’ plan, (ii) are entitled to pursue their alleged post-effective date claims against the reorganized debtors, and (iii) are not precluded from seeking permission to file late proofs of claims and to have those claims afforded class status. In re Lear Corp., No. 09-14326 (ALG), 2012 WL 443951 (Bankr. S.D.N.Y. Feb. 10, 2012). In addition to reaffirming the legal limits of a discharge under a confirmed plan of reorganization, this decision recognizes the (likely remote) possibility that class claims may proceed in the bankruptcy context. Continue reading →

The Delaware Bankruptcy Court recently reaffirmed the finality of the claims bar date and the extremely high bar a creditor seeking to file a claim after the bar date must meet. In In re New Century TRS Holdings, Inc. et al., 2012 Bankr. LEXIS 371 (Bank. D. Del 2012), Judge Kevin J. Carey disallowed and expunged a proof of claim filed four years after the bar date by an individual borrower that had obtained a mortgage from the debtors, notwithstanding that the Court recognized that “this result to a consumer borrower may seem harsh”. Id. at * 34. Continue reading →

Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York recently denied a motion filed by commodity broker customers of MF Global Inc. seeking the appointment of an official committee of commodity broker customers whose fees and expenses would be paid by the debtor’s estate. Judge Glenn held that he lacked statutory authority to appoint an official customer committee in a broker-dealer liquidation under the Securities Investor Protection Act, and could not pay a chapter 7 official committee from estate expenses. Further, Judge Glenn noted that customers’ interests were sufficiently protected by an experienced SIPA Trustee subject to significant oversight. In re MF Global Inc., 462 B.R. 36 (Bankr. S.D.N.Y. 2011). Continue reading →