All items from Business Finance & Restructuring News - Weil

During the 2008 financial crisis and its aftermath, it became commonplace for a distressed bank to be taken over(night) by the Federal Deposit Insurance Corporation (FDIC) and then sold, that same day, to another bank (or bank holding company) that agreed to take on the depository liability associated with the failed bank in exchange for its assets (and customer base). Some banks, however, survived the tidal wave of takeovers. A recent decision by the United States Bankruptcy Court for the Middle District of Georgia in the involuntary chapter 7 case of In re FMB Bancshares, Inc. tells a new chapter in the life cycle of these nearly-failed banks—the possibility of their sale in chapter 11, something that is occurring with greater frequency in the past few years.
Background



Posted 2 days 17 hours ago

Since it burst onto the Bankruptcy Code scene in 2005 with the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), section 503(b)(9) of the Bankruptcy Code, which affords a creditor administrative priority for the value of goods the debtor received within 20 days prior to its bankruptcy filing, has been the subject of many bankruptcy decisions. The express language of section 503(b)(9) has come under heavy scrutiny, with much of the litigation surrounding section 503(b)(9) focusing on what constitutes a “good.” You can read about whether electricity, for example, is a “good” here, here, here and here.



Posted 3 days 18 hours ago

The extent of a transferee’s knowledge in the context of fraudulent transfer claims under the Bankruptcy Code has been a frequent topic of discussion on the Weil Bankruptcy Blog. Recently, we examined the knowledge required to establish a transferee’s “good faith” defense under section 548(c) of the Bankruptcy Code. Now, the United States Court of Appeals for the Third Circuit in SB Liquidation Trust v. Preferred Bank, Nos. 13-1373 and 13-1959 (3rd Cir. Aug. 11, 2014) has provided more food for thought when it comes to the issue of a transferee’s knowledge, concluding that it is not necessary to plead the transferee’s knowledge of the fraudulent transfer to maintain a cause of action under section 548(a)(1) of the Bankruptcy Code.
Background



Posted 4 days 20 hours ago

“Okay. Here we go. The short, short version.” – The Minister, Spaceballs
“I meant what I said and I said what I meant.” – Horton Hatches the Egg, Dr. Seuss



Posted 5 days 18 hours ago

NORTH OF THE BORDER UPDATE
This article has been contributed to the blog by Patrick Riesterer and Mary Angela Rowe. Patrick Riesterer is an associate in the Insolvency and Restructuring group of Osler, Hoskin & Harcourt LLP and Mary Angela Rowe is an articling student at Osler, Hoskin & Harcourt LLP.
In the recent case of Indcondo v. Sloan, the Ontario Superior Court appeared to strike a blow for creditors’ rights when it voided several property conveyances as fraudulent – although they had occurred more than a decade earlier, and the creditor’s first action in this respect had been dismissed. The plaintiff Indcondo was able to achieve a judgment on the merits by stepping into the shoes of its debtor’s former trustee in bankruptcy.
FACTS



Posted 6 days 20 hours ago

Marcia L. Goldstein, Co-Chair of the Firm’s Business Finance & Restructuring Department, along with Lori R. Fife, Debra A. Dandeneau, Jacqueline Marcus and Ronit J. Berkovich, all partners in Weil’s Business Finance & Restructuring Department, co-authored an opinion piece published by The Wall Street Journal’s “Bankruptcy Beat” titled “Weil Partners: Restructuring Doesn’t Have to Stay a Male-Dominated Field.” The authors wrote the piece in response to a recent “Examiners” blog post that was published last week.
The original post was a response to the question “What factors can make restructuring a difficult field in which to balance work and family obligations, and what should professional firms be doing to help employees?” and it argued why the restructuring field would likely remain male-dominated. In response to this, Weil’s piece explains why restructuring doesn’t have to remain male-dominated, citing the authors as five of many examples of successful female bankruptcy professionals who are also mothers. Some of the authors’ key arguments include that women should not self-select out of certain careers for fear of not being able to sustain a work-life balance in the future, and that work-life balance is not solely a woman’s issue, but rather an issue for both males and females in a wide range of professions.



Posted 6 days 21 hours ago

This is the last entry in our four-part series analyzing Judge Drain’s widely read bench ruling issued on August 26, 2014 in connection with the confirmation hearing of Momentive Performance Materials and its affiliated debtors. In Parts I and II, we discussed Judge Drain’s conclusions regarding the appropriate calculation of cramdown interest rates for secured creditors. In Part III, we turned to his analysis of certain subordination provisions found in the indentures governing the Debtors’ senior subordinated notes. Today, in Part IV, we discuss Judge Drain’s rulings regarding the parties’ make-whole and third party release disputes.
What You Need to Know: Make-Wholes
Make-wholes have been a “trending” topic of late in the restructuring community. This is partly because it is difficult to find a consistent approach to the issue within the reported decisions. Therefore, even for those of us who have been closely following recent make-whole developments, a brief refresher on make-wholes is always helpful.



Posted 1 week 2 days ago

As we began discussing this week in our previous entries, on August 26, 2014, Judge Drain of the Bankruptcy Court for the Southern District of New York issued a momentous bench ruling in connection with the confirmation hearing of Momentive Performance Materials and its affiliates. The decision grappled with a number of important topics in modern, complex chapter 11 bankruptcies. In Parts I and II of this series, we examined Judge Drain’s analysis of secured party cramdown considerations in detail. In this entry, we turn to the topic of subordination. In Part IV, we will explore both the “make-whole” aspects of Judge Drain’s decision and third party releases.
What You Need to Know: Subordination
As a preliminary matter, section 510(a) of the Bankruptcy Code serves as the basis for most subordination discussions in bankruptcy court — just as it did in Momentive. The provision simply enforces subordination agreements to the same extent they would be enforceable under nonbankruptcy law.



Posted 1 week 3 days ago

On August 26, 2014, Judge Drain concluded the confirmation hearing in Momentive Performance Materials and issued several bench rulings on cramdown interest rates, the availability of a make-whole premium, third party releases, and the extent of the subordination of senior subordinated noteholders. This four-part Bankruptcy Blog series examines Judge Drain’s rulings in detail, with Part I of this series having provided you with a primer on cramdown in the secured creditor context. Today’s Bankruptcy Blog post, Part II of this series, will examine Judge Drain’s cramdown decision in more detail. Part III will focus on the extent of the subordination of senior subordinated noteholders, and Part IV will explore both the “make-whole” aspects of Judge Drain’s decision and third party releases.
Judge Drain’s Cramdown Holding: Interest Rate on Secured Debt May Be Below Market Even When Market Rate Determinants Exist



Posted 1 week 4 days ago

Weil partner, Debra A. Dandeneau, will participate on a panel to discuss Do Hashtags Generate Business? Using Social Media and the Internet to Grow Your Practice (and Maybe Even Go Viral), at the upcoming 34th Annual Midwestern Bankruptcy Institute & Professional Development Workshop to be held at the Westin Kansas City at Crown Center on October 16th and 17th.
For additional information and to register for the workshop, please visit: http://www.abiworld.org/MW14/schedule.html



Posted 1 week 5 days ago