All items from Business Finance & Restructuring News - Weil

We at the Stern Files recently expressed our disappointment with the lack of more meaningful guidance in Executive Benefits Insurance Agency v. Arkison regarding the nature and extent of bankruptcy judges’ authority, and it seems our prayers have been answered.

Posted 11 weeks 4 days ago

On June 19, 2014, the Bankruptcy Court for the Southern District of New York once again granted Australia-based Octaviar Administration Pty Ltd. chapter 15 recognition as a foreign main proceeding, six months after the Second Circuit overturned an earlier order granting the same relief. The bankruptcy court overruled objections to the petition for recognition from Drawbridge Special Opportunities Fund LP, a defendant in litigation that the Octaviar court-appointed liquidators are pursuing in the U.S., finding that Octaviar has property in the U.S. to satisfy the eligibility requirements of section 109(a) of the Bankruptcy Code, as required by the Second Circuit for granting chapter 15 relief. The decision may indicate that the gateway requirements imposed by the Second Circuit are not such an impediment to foreign debtors seeking chapter 15 relief.
Octaviar’s directors placed Octaviar into voluntary administration in Australia in October 2008; the Supreme Court of Queensland, Australia, appointed Katherine Elizabeth Barnet and William John Fletcher as liquidators of Octaviar in July 2009. Octaviar first filed its chapter 15 petition seeking recognition of the Australian proceeding in August 2012.

Posted 11 weeks 5 days ago

The equitable theory of veil piercing, intended to serve as a rectifying mechanism against certain fraud, dishonesty or wrongdoing, is of particular import in the bankruptcy context given that it is an attractive remedy for a creditor of an insolvent company hoping to obtain a greater recovery on its claim. State law governs veil piercing claims and sets forth the hurdles a party must overcome in order to persuade the bankruptcy court that the debtor’s corporate formalities should be ignored. If a party is able to demonstrate under governing state law that an individual or affiliated entity should be held liable for a company’s debt, the bankruptcy court may permit the piercing of the corporate veil to hold such party liable. Whether or not a judgment creditor could pierce the corporate veil of a judgment debtor was at issue in Burberry Limited and Burberry USA v. RTC Fashion Inc., d/b/a Designers Imports t/a Fashion58.Com and Asher Horowitz (Index No. 110615/14) (N.Y. Sup. Ct. 2014).

Posted 11 weeks 6 days ago

Weil partner, Harvey Miller, recently provided his commentary on municipal filings for the latest installment of The Examiners, on The Bankruptcy Beat.  Click here to read his commentary in The Examiners Take on Municipal Distress.

Posted 12 weeks 1 day ago

In Part I of our entry on Weinman v. Walker (In re Adam Aircraft Indus. Inc.), a recent decision by the Bankruptcy Appellate Panel for the Tenth Circuit, we chronicled the ouster of Adam Aircraft’s president Joseph Walker and discussed several factors the BAP considered in finding that Walker made a clean break from Adam Aircraft and, thus, was not a statutory insider after his resignation on February 1, 2007. In Part II, below, we discuss the BAP’s holding regarding Walker’s non-statutory insider status.
Part I Refresher (Skip this refresher if you have eidetic memory or remember the main points. Read this refresher if you—GASP!—did not read yesterday’s post.)

Posted 12 weeks 4 days ago

Who are we kidding? The topic of statutory insiders has been a blog favorite, year after year. Not only are preference and fraudulent transfer actions common weapons in the bankruptcy arsenal, but the decisions in the area often lead to a new angle to explore — and a lesson to learn for both debtors and creditors at every corner. Weinman v. Walker (In re Adam Aircraft Indus. Inc.), a recent decision by the Bankruptcy Appellate Panel for the Ninth Circuit, does just that. In In re Adam Aircraft Indus. Inc., Bankruptcy Judges Karlin, Jacobvitz, and Hall explore the burning question that is sure to creep into this week’s water cooler conversation: When does an insider stop being an insider?
Debtor Adam Aircraft Industries designed and manufactured carbon composite aircrafts before filing a voluntary chapter 7 petition in 2008. Joseph Walker was Adam Aircraft’s former president and a member of its board of directors from about 2003 or 2004 until early February, 2007. George Adam (i.e., the “Adam” in “Adam Aircraft”) was its CEO and chairman of the board.

Posted 12 weeks 5 days ago

Weil Business Finance & Restructuring Partner, Harvey Miller, will be interviewed at the National Organization of Life & Health Insurance Guaranty Association’s (NOLHGA) 22nd Annual Legal Seminar, to be held at The New York Hilton (Midtown), July 17 through 18, 2014.
Click here for more details on this event.

Posted 12 weeks 5 days ago

This article has been contributed to the blog by David Rosenblat and Justine Erickson. David Rosenblat is an associate in the insolvency and restructuring group of Osler, Hoskin & Harcourt LLP an Justine Erickson is a summer student at Osler, Hoskin & Harcourt LLP.
As part of a public consultation process on insolvency law reform, Industry Canada published a discussion paper seeking submissions on a number of topics, including the use of arrangement provisions in the Canada Business Corporations Act (the “CBCA”) as a mechanism for restructuring (this consultation process was described in a recent article). This article provides a high level comparison of the current legal and legislative framework for restructuring under the Companies’ Creditors Arrangement Act (the “CCAA”) and the CBCA (collectively, the “Acts”).

Posted 12 weeks 6 days ago

To celebrate the one event that affects workplace productivity worldwide, we bring you our World Cup edition of Weil’s Bankruptcy Beach (or, in this case, multitasking while sitting in front of a screen for eight hours) Reading. This week, our Bankruptcy Beach Reading series brings you bankruptcy trivia, with each question relating to one or more countries competing in the 2014 World Cup (even if, as of today, that country has been eliminated from advancing to the Group of 16). Don’t worry if you are one of the few people on the planet who knows nothing about the World Cup or futbol — for the most part, your knowledge of world bankruptcy events should pull you through this challenge. Click on the links to see the answers and find out how many goals you scored.
 1. Which bankruptcy judge shares a last name (and a city) with the MLS’s all-time top scorer? (OK — this one requires just a tiny bit of soccer knowledge. For an easier version of the question, click here.)
1. Answer
2.  What controversial element of Mexican debtor Vitro SAB de CV’s plan led courts in the United States to deny enforcement of the plan in chapter 15?
(a) Nonconsensual third-party releases
(b) Cramdown without an impaired accepting class
(c) Equitable mootness on appeal
(d) Distribution of prepayment premium to undersecured creditor

Posted 13 weeks 2 days ago