In a new, unpublished decision in the U.S. Court of Appeals, the Fourth Circuit affirmed a bankruptcy court’s order re-characterizing a portion of a
The District Court for the Southern District of New York recently issued an opinion in Picard v. Katz, et al., (In re Bernard L. Madoff Investment Securities LLC), which limits avoidance actions against a debtor-broker’s customers to those arising under federal law based on actual, rather than constructive, fraud.
The liquidating trustee appointed by the confirmed chapter 11 plan brought an adversary proceeding against a minority investor of the debtor, and a former director of the debtor, alleging that: the investor and the director had breached the fiduciary duties owed to the debtor, and the investor had defrauded the debtor.
A recent bankruptcy case in Pennsylvania, In re Shubh Hotels Pittsburgh, LLC, 439 B.R. 637 (Bankr. W.D. Pa. 2010), held that as long as the “debtor-in-possession” exercises its sound business judgment when making its decision, the “debtor-in-possession” can enter into a new 15-year franchise agreement over the objection of the secured lender.
On September 30, 2010, in In re American Safety Razor, LLC, et al, Case No 10-12351 (MFW), the United States Bankruptcy Court for the District of Delaware ruled that the debtors' proposed bid procedures for the sale of the business were unfair and unreasonable.
The New York State Court of Appeals held that lenders may rely on borrower representations and warranties and that they have no affirmative duty to conduct independent investigations of their borrowers' books and records.
In 1999 the Third Circuit Court of Appeals rendered its decision in Calpine Corp. v. O’Brien Environmental Energy, Inc. (In re O’Brien Environmental Energy, Inc.), 181 F.2d 527, denying Calpine Corporation’s request for the payment of a break-up fee after Calpine lost its effort to acquire the assets of O’Brien Environmental Energy out of bankruptcy.
Troubled economic times predictably result in an escalation in bankruptcy filings.
In the context of corporate acquisitions, the managing directors of the acquiring company are regularly faced with the question of the scope of the “due diligence,” the review of the target company.