Author Archives: Nicole M Stephansen

SDNY Bankruptcy Court Holds that “Soft Dollar” Claims Are Not Customer Claims Under SIPA

On July 10, 2012, Judge James M. Peck of the Bankruptcy Court for the Southern District of New York ruled that so-called “soft dollar” claims do not qualify for treatment as customer claims under the Securities Investor Protection Act. The decision represents the first time that any court has been asked to determine the status of “soft dollar” claims under SIPA. In re Lehman Brothers Inc., No. 08-01420, 2012 Bankr. LEXIS 3103 (Bankr. S.D.N.Y. July 10, 2012). Continue reading

Hostess Court Dismisses Motion to Reject Expired Collective Bargaining Agreements Under Bankruptcy Code Section 1113

On June 22, 2012, Judge Robert Drain of the United States Bankruptcy Court for the Southern District of New York granted the motion of the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union to dismiss Hostess’s motion to reject certain expired collective bargaining agreements. The court held that section 1113 of the Bankruptcy Code no longer applied to key portions of the CBAs because the agreements had expired – certain CBA obligations remained in force only by operation of the National Labor Relations Act. In re Hostess Brands, Inc., 2012 WL 2374235 (Bankr. S.D.N.Y. June 22, 2012). Continue reading

SDNY Bankruptcy Court Opens Door For Rule 2004 Use in Chapter 15

On May 25, 2012, Judge Allan L. Gropper of the United States Bankruptcy Court for the Southern District of New York approved a motion to compel the production of certain documents under section 1521 of the Bankruptcy Code. In his decision, Judge Gropper also suggested that the broad discovery provisions of Bankruptcy Rule 2004 may apply to chapter 15 discovery requests, but stopped short of making such a ruling. In re Millennium Global Emerging Credit Master Fund Limited, Case No. 11-13171 (ALG), (Bankr. S.D.N.Y May 25, 2012). Continue reading

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

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