Here’s an aggregation of 28 of my Twitter posts from mid-June 2018, with links to important cases, articles, and news briefs that restructuring professionals should find of interest. Don’t hesitate to reach out and contact me to discuss any posts, and thank you for reading!


  • Avoidance Actions – Heightened Pleading Standards – BK-WD-MI:  “The Complaint’s allegation that the ‘Debtors’ made an aggregate amount or series of transfers over time to unidentified transferees, without further detail, doesn’t satisfy the heightened pleading standard for actual fraudulent transfer claims. In re Great Lakes Comnet Inc
  • Bank Holding Co. – Tax Allocation Agreement – 10th Cir:  A tax allocation agreement creates an agency between the bank holding company and the bank so that the agreement’s treatment of tax refunds doesn’t differ from the general rule that a refund in a joint return belongs to the loss generator. Consequently, the FDIC, as receiver, gets the bank’s $4.8M refund. In re United Western Bancorp Inc
  • Collateral – 506(c) Surcharge – BK-ND-WV:  Court refuses to surcharge lender’s collateral for unpaid chapter 11 attorney’s fees since they were not incurred primarily to protect or preserve the collateral, didn’t provide the lender with a direct & quantifiable benefit, & were not reasonable and necessary to preserve or dispose of the collateral. In re Tara Retail Group Inc
  • Commercial Leases – Expiration – BK-ED_MI:  When has a non-residential real property lease “been terminated by the expiration of the stated term of the lease” per 362(b)(10)? Court here holds not if lease was terminated early based on lessor’s right to terminate it if the debtor-lessee defaults. In re Indiana Hotel Equities LLC
  • Conversion – Intangible Rights – BK-ND-IL:  In recounting sordid facts as few can, Judge Cox notes that Illinois court don’t recognize an action for conversion of intangible rights. Conversion of commercial paper, however, is an exception to the general rule on the theory that the intangible right associated with commercial paper is merged into the specific document. In re Santilli
  • Disclosure Statement – Unconfirmable Plan – Retention of Equity – BK-ED-NC:  Court refuses to approve disclosure statement where plan, on its face, is not confirmable in light of its proposal that the owner retain his equity interest in the Debtor without adding “new value” to the Debtor. In re CHL LLC
  • Fiduciary Duties – LLC Managers to Members – BK-ED-TX:  Under Texas law, “a formal fiduciary relationship does not exist between managers and members. As such, a fiduciary relationship, if any, must exist via an informal relationship.” Higher Perpetual Energy LLC v Higher Power Energy LLC
  • Fraudulent Transfer – Collapsing Transactions – Resultant Situs of Transfer as Domestic or Foreign – BK-SD-NY:  “The Court is not aware of any case considering the implications of collapsing a multi-step transaction on a determination of the situs of an alleged fraudulent transfer. However, it is clear that in directing courts analyzing fraudulent transfer claims to consider the “composite implications” in collapsing a multi-step transfer, the Second Circuit did not limit that review only to the implications for assessing reasonably equivalent value.” In re CIL Limited
  • Liquor Licenses – Security Interests – BK-D-AK:  Case here proves that maintaining security interests or priorities to proceeds from the sale of a liquor license requires much care and consideration. In re Aqua Pesca LLC
  • Structured Dismissal – Effect on Pending Adversaries – BK-D-NM:  A bankruptcy court can retain jurisdiction after case dismissal over non-core, related proceedings commenced before dismissal, though ordinarily non-core, related-to proceedings are also dismissed upon dismissal of the underlying bankruptcy  case. “In a structured dismissal where a plan is not confirmed, claims to unclaimed funds only arise after the case is dismissed and are not governed by any provision of the BK Code. As such, claims to unclaimed funds do not arise in or arise under and so are non-core.” In re Dees FoodService ABQ Inc
  • Turnover Motions – Procedural Requirements – BK-CD-CA:  Fed. R. Bankr. P. 7001 requires an adversary to recover money or property from third parties who are not the debtor. Thus, a 542 turnover motion is procedurally deficient to recover property in which tenants are living and rents that they’re withholding. In re Grand View Financial LLC
  • Unjust Enrichment – Pleading Standards – BK-WD-MI:  “[T]he law operates to imply a contract in order to prevent unjust enrichment, and . . . this will not occur if there is already an express contract on the same subject matter. . . . In order to state a claim for unjust enrichment, the Trustee must plead some benefit was derived separate & apart from the [contract between the parties].” In re Great Lakes Comnet Inc


  • Power Purchase Agreements – Thorny Contractual Provisions Dissected – ND-IL:  Court holds that the PPAs unambiguously require NIPSCO to pay the “cost to cover.” Court also dissects thorny contractual provisions regarding “metered output,” “unexcused failure to take,” “force majeure,” “voluntary curtailments” in NIPSO’s battle with Iberdrola, the second largest wind power company. Barton Windpower LLC v Northern Indiana Public Service Company
  • Veil Piercing – Summary Judgment – IL-AP-1st:  “Plaintiffs failed to establish any genuine issue of material fact on plaintiffs’ corporate veil-piercing claim as to whether adhering to the corporate fiction would promote an injustice.” Buckley v Abuzir


  • Athletic Injuries – Premises Liability:  The results in Bush’s and Ryan’s suits could cause the NFL owners try to expand the scope of the collective bargaining agreement to further prevent these sorts of lawsuits. Jenner’s Nelson says: “I am not sure they will be successful,” he said. “But given now that you have had two lawsuits, I suspect they will want to nip it in the bud.” Reggie Bush Injury Award Likely To Spur Pro-Athlete PI Suits, by Zachary Zagger at Law360
  • Collateral Transfers – Lender Response to a Debtor’s “Pulling a J. Crew”:  Resignation comes as PetSmart’s lenders challenge the company’s transfer of more than 1/3 of the equity in to separate entities, putting it beyond creditor reach. A lender instructed Citigroup not to release the liens & guarantees on the Chewy stake. Citigroup Resigns as PetSmart’s Term Loan Agent, by Katherine Doherty and Eliza Ronalds-Hannon at Bloomberg
  • Sandbagging Delaware:  Dealmakers may be surprised at the doubts cast in recent judicial comments on the “pro-sandbagging” reputation of Delaware. Parties may wish to account for comments by the Delaware Supreme Court in negotiating sandbagging-related purchase agreement provisions. Sandbagging in Delaware, by Daniel Wolf of Kirkland & Ellis, via Harvard Law School Forum on Corporate Governance and Financial Regulation


©2018, Steve Jakubowski