Rafool v. Evans, 497 B.R. 312 (C.D. Ill. 2013) –
A chapter 7 trustee brought a legal malpractice case against a debtor’s prepetition attorneys for failing to advise the debtor to draw on letters of credit prior to filing bankruptcy. The case turned on whether the letters of credit could have been drawn after the bankruptcy was filed. Continue reading
In re Yishlam, Inc., 495 B.R. 328 (Bankr. S.D. Tex. 2013) –
The debtor owned units in two apartment buildings. Shortly after it filed bankruptcy, its mortgage lender sought a determination that it was a “single asset real estate” debtor under Section 101(51B) of the Bankruptcy Code – which would trigger special provisions regarding relief from the automatic stay under Section 362(d)(3). Continue reading
Based on a subordination agreement, senior secured noteholders contended that they were entitled to receive payment of post-petition interest from bankruptcy plan distributions that would otherwise go to junior noteholders. The junior noteholders countered that the senior noteholders were not entitled to the benefit of the subordination provision dealing with post-petition interest. Continue reading
In re Eastman Kodak Co., 495 B.R. 618 (Bankr. S.D.N.Y. 2013) –
The debtor assumed a ground lease prior to the deadline for assumption or rejection of non-residential real property leases. It later sought to assign the lease in connection with a proposed sale. The landlord objected on the basis that assumption and assignment must occur at the same time. Continue reading
In re USA United Fleet Inc., 496 B.R. 79 (Bankr. E.D.N.Y. 2013) –
A state used the debtors’ prepetition unemployment insurance experience rating to determine the unemployment insurance tax liability of a buyer of the debtors’ assets. The buyer objected that it was not subject to any successor liability under the bankruptcy sale order, and sought a bankruptcy court determination that the sale “free and clear” of “interests” meant that the state did not have a right to assess the buyer based on the debtors’ experience. Continue reading
Baldiga v. C.A. Acquisition Corp. (In re Cyphermint, Inc.), 496 B.R. 49 (Bankr. D. Mass. 2013) –
A chapter 7 bankruptcy trustee brought an adversary proceeding against a buyer and its designated purchaser for breach of contract and civil contempt. The defendants raised various defenses, including frustration of purpose – arguing that DHL’s failure to perform under a shipping contract with the debtor that was part of the acquired assets discharged the defendants from further performance under the sale agreement. Not surprisingly, that argument did not fly with the bankruptcy court. Continue reading
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