Author Archives: Matthew J Oliver

Federal-Mogul Court Confirms That Bankruptcy Law Trumps Anti-Assignment Provisions in Insurance Policies

Posted on July 18, 2012 by Christopher J. Updike and Matthew J. Oliver

On May 1, 2012, the United States Court of Appeals for the Third Circuit in In re Federal–Mogul Global, Inc. confirmed that anti-assignment provisions in a debtor’s insurance liability policies are preempted by the Bankruptcy Code to the extent they prohibit the transfer of a debtor’s rights under such policies to a personal-injury trust pursuant to a chapter 11 plan. In re Federal-Mogul Global Inc., — F.3d —, 2012 WL 1511773 (3d Cir. 2012). In so holding, the Third Circuit follows its prior dicta as well as the precedent of its sister circuits, and provides its most definitive ruling on the issue to date. Continue reading →

Posted in Plans/Confirmation

Judge Gropper Denies the Appointment of an Official Committee of Equity Holders in Kodak’s Chapter 11 Cases

Posted on July 16, 2012 by Audrey Aden Doline and Matthew J. Oliver

On June 28, 2012, Judge Allan Gropper of the United States Bankruptcy Court for the Southern District of New York declined to appoint an official committee of equity holders in Kodak’s chapter 11 cases. The bankruptcy court determined that the appointment of an official committee was not warranted at that time, given that the costs to the bankruptcy estates would be substantial and equity’s interests were already represented by other constituencies seeking to maximize value and by a sophisticated ad hoc group of shareholders. In re Eastman Kodak Company, Case No. 12-10202 (June 28, 2012). Continue reading →

Posted in Analysis

In re Heritage Highgate, Inc.: Timing Is Everything to Secured Creditors Facing Valuation Issues

Posted on May 25, 2012 by Matthew J. Oliver and Nicole M. Stephansen

On May 14, 2012, the United States Court of Appeals for the Third Circuit upheld a ruling by the Bankruptcy Court for the District of New Jersey that the fair market value of a creditor’s collateral as of the plan’s confirmation date is the proper method of valuing a secured creditor’s claim pursuant to section 506(a) of the Bankruptcy Code. The Third Circuit also adopted a “burden-shifting framework,” finding that a secured creditor will bear the ultimate burden of proving the extent to which its claims are secured pursuant to section 506(a). Continue reading →

Posted in Claims

SNP Boat Service S.A.: Clarifying the Limited Reach of a U.S. Bankruptcy Court in Chapter 15

Posted on May 9, 2012 by Matthew J. Oliver

Addressing issues of comity in a chapter 15 bankruptcy proceeding, Judge K. Michael Moore of the United States District Court for the Southern District of Florida recently ruled that a U.S. court can only examine whether the overarching foreign law in question comports with the United States’ concepts of fairness and due process, but that it cannot examine specific proceedings or decisions of the foreign court. SNP Boat Service S.A. v. Hotel Le St. James, No. 11-62671 (S.D. Fla. Apr. 18, 2012). Chapter 15 of the Bankruptcy Code was enacted in 2005 for the purpose of providing an effective mechanism for dealing with cases of cross-border insolvency. Through chapter 15, a U.S. bankruptcy court can “recognize” a foreign restructuring proceeding and play an important role in the coordination of an international debtor’s affairs. Accordingly, Judge Moore’s ruling in SNP Boat Service is significant in that it clarifies a United States court’s ability to question the legal framework of a foreign jurisdiction when determining whether or not to give force and effect to its rulings. Continue reading →

Posted in Chapter 15

Mirant: Fifth Circuit Renders Pro-Creditor Rulings in Fraudulent Transfer Action

Posted on April 4, 2012 by David E. Kronenberg and Matthew J. Oliver

On March 20, 2012, in an adversary proceeding stemming from the Mirant bankruptcy, the U.S. Court of Appeals for the Fifth Circuit (i) affirmed the U.S. District Court for the Northern District of Texas’ ruling that Mirant’s recovery trust had standing to pursue a fraudulent transfer action even though Mirant’s unsecured creditors arguably received a full recovery under Mirant’s confirmed plan, and (ii) overturned the District Court’s determination that Georgia’s, rather than New York’s fraudulent transfer law, applied to the action. Because the District Court had dismissed the fraudulent transfer action based on Georgia law, which the Fifth Circuit now deemed inapplicable, the Fifth Circuit remanded the case for adjudication under New York law. MC Asset Recovery LLC v. Commerzbank A.G. et al., 2012 WL 919620 (5th Cir. (Tex.)). The Fifth Circuit’s rulings resurrected Mirant’s seven-year-old fraudulent transfer action, and are important, pro-creditor precedents that could impact numerous pending and future fraudulent transfer actions. Continue reading →

Posted in Analysis, Avoidance Actions/Fraudulent Transfers

The Unclear Status of Stakeholder Negotiations in a Post-WaMu World

Posted on November 4, 2011 by John J. Rapisardi, Matthew J. Oliver, and Michael J. Cohen

Among the several issues addressed in the September 13th opinion of the United States Bankruptcy Court for the District of Delaware in In re Washington Mutual, Inc., the distressed investment and restructuring community has been focused on the holding that the participation of certain noteholders (the “Settlement Noteholders”) in plan-related settlement negotiations and subsequent trading activity gave rise to colorable claims that could be asserted against them. This ruling has cast uncertainty upon creditors’ ability to play a constructive role in achieving successful reorganization outcomes by way of consensual agreement. In light of the essential policy interest favoring settlements over protracted litigation, the framework set forth in WaMu may have the regrettable effect of chilling creditor participation in negotiations that would otherwise serve to benefit all stakeholders. Continue reading →

Posted in Analysis, Claims, Plans/Confirmation Tagged , |

In re Salander O’Reilly Galleries 453 B.R. 106, (S.D.N.Y. Jul. 18, 2011)

Posted on August 12, 2011 by Sharon J. Richardson and Matthew J. Oliver

The debtor in Salander was a Manhattan art gallery that had obtained financing from a bank, allegedly secured by a blanket lien on all of the debtor’s assets. Approximately a year and a half before the commencement of the bankruptcy case, Kraken Investment, Ltd. and the debtor entered into a consignment agreement which provided for Kraken’s consignment of a Sandro Botticelli painting titled “Madonna and Child” to the debtor. Kraken had commenced a prepetition lawsuit in New York Supreme Court to recover the painting which was stayed by the bankruptcy filing. During the case, Kraken asserted a claim for the Botticelli pursuant to a court-approved art claims protocol, a liquidation trust was then formed pursuant to a confirmed plan of liquidation, and the bank assigned its interest in the Botticelli to the trust. Continue reading →

Posted in Standing/Jurisdiction, Stern v. Marshall Updates Tagged , , |