Here’s an aggregation of 35 of my Twitter posts from June 16-18, 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, and thank you for reading!

BK RELATED CASES:

  • 363 APA Traps – BK-ED-TN:  Words relating to “Excluded Assets” NOT to put in an 363 sale asset purchase agreement unless you’re prepared for a fight with the trustee. “The Parties agree to work together, in good faith, to finalize this exhibit as soon as practicable after the Effective Date.” In re HC Liquidation Inc
  • Executory Contracts Defined – 2d Cir:  Second Circuit says it “need not resolve the question of which test” applies for determining whether a contract is executory: the Countryman test or the 2d Cir’s “some performance due test.” Guess the 2d Cir is reconsidering whether the latter holds. In re NanoDynamics Inc
  • Federal Priority Statute in BK – B-ED-VA:  “While the US Objection seeks to disproportionally re-prioritize the estate distribution in favor of the US, Congress has made clear that the Federal Priority Statute cannot be invoked for that purpose.” In re Health Diagnostic Laboratory Inc
  • Informal Proofs of Claim – BK-SD-TX:  “Informal proof of claims arise from a common law doctrine whereby pre-bar date filings not conforming to the FRBP’s formal filing requirements are treated as informal proofs of claim that can be amended to conform to the rules.” In re Houston Bluebonnet LLC
  • Lis Pendens Filings by BK Trustees – BK-WD-MI:  Even without an adversary based on a fraudulent conveyance theory, bankruptcy trustees sometimes file lis pendens to guard against unauthorized post-petition transfers (like those that the Defendants evidently intended to effect here). In re Rosich
  • Maritime Liens – 2d Cir:  Sub-subcontractor who supplied bunkers to a vessel at the direction of the subcontractor didn’t furnish them on order of vessel’s owner or its agent and so wasn’t entitled to a maritime lien. There is no evidence that the charterer of the vessel agreed to be bound by the subcontractor’s purchase. ING Bank NV v MV TEMARA IMO No 9333929
  • Petition – Wet Signatures – BK-MD-PA:  “I believe the effort to convince me that wet signatures [on the petition] are required has been misdirected. The real issue is whether FRBP 1008 and 9011 have been complied with.” In re Klitsch
  • Preferences – Insider Loans – BK-ED-MI finds fact issue exists as to whether multiple sporadic insider loans over the years enables the one loan paid during the preference period to have been deemed incurred in the “ordinary course of business.” Matter of Oakland Physicians Medical Center LLC
  • Publication Notice – 363 Sale – Due Process – BK-ED-KY:   A “known” party is entitled to actual notice of the sale and confirmation process. Notice by publication of the sale 14 yrs ago that excluded this party did not satisfy constitutional due process. In re HNRC Dissolution Co
  • Punitive Damages – Stay Violations – BK-SD-OH:  “Rarely has the Court seen such a blatant violation of the automatic stay as is presented in this case. Sanctions in the form of attorneys’ fees, costs, and punitive damages will be imposed.” Ct assesses punitives at three times fees & costs. In re Stringer
  • “Related to” Jurisdiction – Indemnity & Alter Ego Claims – BK-DE  The potential indemnity claim of the CEO/Director/Majority Shareholder satisfies the Pacor “related to” jurisdiction test. Also “related to” jurisdiction exists based on the creditor’s attempt to pierce the corporate veil because any finding of veil piercing requires a finding of liability against Debtor. In re LTC Holdings Inc
  • Solvency Analysis – Supplementary Proceedings – ND-IL:  Per FRCP 69(a), supplementary proceedings to enforce a money judgment are governed by law of forum state, and “[n]othing in that statute, or IL Supreme Ct rules on supplementary proceedings, expressly prohibits a judgment creditor from filing a 2d motion to compel turnover of the same assets that were the subject of a previous, unsuccessful motion in the same proceeding…. [Further,] [a]t least one other court applying Illinois law has declined to discount the value of a legal claim that, like the Trustee’s here, was pending at the time of an alleged fraudulent conveyance and was subsequently reduced to judgment.” In re Emerald Casino Inc

INTERESTING CASES FROM ILLINOIS COURTS & THE UNITED STATES SUPREME COURT:

  • 1st Amendment – Political Apparel Ban – SCOTUS:   Justice Roberts put together an interesting 7-2 majority in the MN Voters Alliance case. As I was reading the opinion, I had thought the case would be decided in favor of the ban on political badges inside a polling place. Instead, the Court ruled that the statute was incapable of reasoned application under the First Amendment since the statute didn’t define “political,” which could have an expansive meaning, and that Minnesota’s construction as the meaning of referred to “messaging” presents line-drawing problems. One thing evident from this term’s opinions, however, is the importance of the First Amendment to all the justices and how protection of this right is paramount to them all. The tenor of today’s political discourse must be weighing on their collective judicial conscience. Minnesota Voters Alliance v Mansky
  • Bad Neighbors & Bad Fences – IL-AP-3d:  This case proves that bad fences can make for bad neighbors too. Court rules the defendant could be required to pay a just cost to build a division fence with adjoining landowners per the IL Fence Act, but that it was error for the trial court to say that the defendant was required to pay 1/2 the cost because there were issues of fact regarding whether the defendant violated the Fence Act by removing a preexisting division fence between the parties’ properties without notice, which act itself requires the defendant to pay for replacement of the fence. Judith Mottl Kerr Trust v Holm
  • Interpreting Foreign Law in US Courts – SCOTUS:   In determining, for purposes of considering an action under the Sherman Act, that Chinese law required the fixing of price & quantity of Vitamin C exports, the Appellate Court should have considered sources beyond the amicus brief filed by China’s Ministry of Commerce. Animal Science Products Inc v Hebei Welcome Pharmaceutical Co Ltd
  • Lis Pendens – Jurisdiction – Subsequent Purchasers – IL-AP-4th:  Court examines the “jurisdiction over both the person and the res” requirement for a lis pendens notice to be effective and concludes that it doesn’t require personal jurisdiction over a subsequent purchaser & only refers to the property owner at the time of the action.  Bonnell v City of Grafton
  • Preliminary Injunction – Trademarks – Evidentiary Needs – 7th Cir:   Court affirms a grant of injunction against ads vividly implying that milk from rbST-treated cows is unwholesome, ruling that consumer surveys or other “hard” evidence of actual consumer confusion are unnecessary at the preliminary injunction stage. Eli Lilly and Company v Arla Foods Inc
  • Restrictive Covenants – Non-Solicitation – ND-IL:   Court examines the plain meaning of “introduces” in an action to enforce a non-solicitation provision that precluded a party from soliciting entities that the party seeking to enforce the provision “introduces” to the other. Syncreon Technology (USA) LLC v CRST Specialized Transportation Inc
  • Term Limits – 7th Cir:  City referendum providing for a term limit for the office of Mayor that prevented a candidate from running for Mayor based on his 20 consecutive years as alderman didn’t violate his equal protection rights, even if aimed a him in particular. The referendum was rationally related to the city’s legitimate governmental interest in imposing term limits. Jones v Markiewicz-Qualkinbush

BK RELATED NEWS & ARTICLES:

LAW RELATED NEWS & ARTICLES:

LIFE, BUSINESS, AND THE WORLD GENERALLY:

©2018, Steve Jakubowski