Here’s an aggregation of some of my Twitter posts from April 23-30, 2018, with links to important cases, articles, and news briefs that restructuring professionals will find of interest. Don’t hesitate to reach out and contact me to discuss any posts.
APRIL 23 – 30, 2018
- US Supreme Court: Citing Marathon and Stern – “This Ct has not ‘definitively explained’ the distinction between public and private rights, and its precedents applying the public-rights doctrine have ‘not been entirely consistent.’ This case doesn’t require adding to the ‘various formulations’ of the public-rights doctrine. … Our precedents have recognized that the doctrine covers matters ‘which arise between the Govt & persons subject to its authority in connection with the performance of the constitutional functions of the executive or legislative departments.’ … In other words, the public-rights doctrine applies to matters ‘arising between the government and others, which from their nature do not require judicial determination and yet are susceptible of it.’ ” Oil States Energy Services LLC v Greenes Energy Group LLC
- 2d: New York’s internal affairs doctrine does not apply to in pari delicto. “Since we conclude that New York law applies to DLA’s in pari delicto defense based on an interest analysis, we need not reach the question of whether, under NY law, the law governing an affirmative defense to a claim is the same as the law governing the claim itself.” In re ICP Strategic Income Fund Ltd
- 6th: The Bk Ct correctly concluded that the assignment of “all the right, title and interest of [BOA] in, to, and under the Loan Docs,” did not include any “non-contract claims (including for breach of fiduciary duty) predating the Assignment. In re Modern Plastics Corporation
- 8th: The authority of BK Ct to issue “necessary or appropriate” orders did not allow it to order substantive consolidation of archdiocese estate with non-debtor parishes/parish schools even though these parishes and schools held the majority of archdiocese’s property and were supervised by the Archdiocese. Also, there was no contention that parishes and schools were archdiocese’s alter egos, and isolated incidents of lack of corporate formality or commingling of assets did not overcome these barriers to substantive consolidation. In re Archdiocese of Saint Paul and Minneapolis
- WD-WA: BK Ct properly followed the majority of courts in applying the accrual approach to the landlord’s administrative rent claim. In re Door to Door Storage Inc
- B-ED-AR: Good analysis by the Court in rejecting the creditor’s ordinary course defense to a preference action after a trial on the merits. In re Turner Grain Merchandising
- B-MD-FL: Court takes a hatchet to an oversecured lender’s attorney’s fees. In re Unnerstall
- B-SD-FL: It isn’t accurate to say the 11th Cir in Edwards rejected the analysis of the 7th Circuit in Scholes. “The 11th Cir rejected only the argument that app’t of a BK trustee should be given the same effect as app’t of a receiver, automatically terminating the in pari delico defense. . . . .At the time the debtors filed their BK petitions, they had been cleansed of the bad actors and were no longer subject to the in pari delicto defense. As a result, under the holding in Edwards, the trustee is also free from the in pari delicto defense.” In re Palm Beach Finance Partners LP
- B-ND-IL: “The Barton doctrine does not apply to this matter as the Kraft Parties are not seeking to sue the Trustee in another court. Nothing in Barton or Linton or any of the foregoing stands for the proposition that a party cannot sue a trustee in BK Ct.” In re World Marketing Chicago LLC
- B-ND-IL: Ch 13 step-up plan providing for higher payments on secured car loan after admin. claims are paid violated the “equal monthly payment” requirement and could not be confirmed over the secured creditor’s objection. In re Williams
- B-SD-NY: Court reexamines whether claims are derivative or individual, complicated by the fact that Cayman law doesn’t authorize shareholder derivative actions. In re CIL Limited
- B-SD-TX: “A substantial majority of the 19 relevant factors” indicate that the truck drivers are independent contractors. Thus, individuals who have driven the Debtor’s trucks are not employees of the Debtor but rather are independent contractors. In re Pioneer Carriers LLC
Interesting Non-Bankruptcy Cases from Illinois Courts:
- ND-IL: “The Non-Compete Covenant clearly would prevent the employee from taking any number of plausible roles at another industry player, no matter how far removed from actual competition with Medix. Such a prohibition is unenforceable.” Medix Staffing Solutions Inc v Dumrauf
LAW RELATED ARTICLES:
- Injunctive Relief: Professor Cass Sunstein in “Irreparability and Irreversibility” provides very valuable insights for those seeking injunctive relief and arguing irreparable harm.
- Attorney General Ed Levi Remembered: University of Chicago Law School’s Prof. Ed Levi (A”H) remembered. Little known fact: he taught Jim Comey (and the rest of us) “Elements of the Law,” first year, first trimester. The Sense of Justice That We’re Losing, by David Leonhardt, from NYT
- Baidu and TPG: Baidu to spin out financial services arm with backing from TPG, from Financial Times.
- Cosby Trial (1): How Bill Cosby’s defense team’s vicious strategy backfired, from ABC News.
- Cosby Trial (2): “At another point, Ms. Feden saw what she thought was a smile spreading across Mr. Cosby’s face. ‘He’s laughing like it’s funny! she said, a shot that later prompted Mr. Cosby’s team to dispute that he had laughed.” The Prosecutor Who Stared Down Bill Cosby, from NYT.
- Farmers’ Credit Squeeze: The next threat stalking American farmers is the end of cheap money, from Bloomberg
- GOB Sales: There’s a science and art to running a going-out-of-business sale. (And business is booming), from CNBC.
- Afghan Wrestler-Hero Remembered: After Each Attack He Carried the Wounded. Then He Became a Victim, from NYT.
Thanks for reading!