Business Restructuring Review
In this issue:
- The End of Frenville: Relief or More Confusion?
The Third Circuit abandoned a 26-year-old precedent and adopted a version of the "conduct" test to determine when a claim arises for purposes of the Bankruptcy Code.
- Advisory Committee on Bankruptcy Rules Recommends Sweeping Revisions to Bankruptcy Rule 2019
In its final recommendation for changes to Rule 2019, the Rules Committee counseled against changing the rule to require disclosure, except in rare cases, of claim pricing and acquisition information by members of unofficial creditor groups.
- Death and Taxes Assured: Confirmation of Shell Corporation’s Tax-Avoidance Chapter 11 Plan Denied
As an apparent matter of first impression, the Seventh Circuit affirmed an order denying confirmation of a chapter 11 plan proposed by a company whose sole asset consisted of tax attributes and whose only creditor was a related company attempting to acquire the attributes to avoid taxes.
- No Safe Harbor in a Bankruptcy Storm: Mutuality "Baked Into the Very Definition of Setoff"
A New York bankruptcy court ruled that, absent mutuality of obligations, funds on deposit with a bank are not protected by the Bankruptcy Code’s financial contract safe-harbor provisions and cannot be used to set off an obligation allegedly owed by the debtor under a master swap agreement.
- Insider’s Compensation Claim Capped at Zero Under Section 502(b)(4)
A New York bankruptcy court ruled that the debtor’s former CFO was still an "insider" despite submitting a resignation letter and that her claim arising from the rejection of her prepetition consulting agreement should be capped at zero.
- New U.S. Supreme Court Rulings
The Court recently handed down a pair of rulings dealing with issues arising in individual bankruptcy cases.
- Bankruptcy Studies to Be Conducted Under New Financial Reform Law
The law calls on the Board of Governors of the Federal Reserve System to conduct two bankruptcy-related studies.
- The U.S. Federal Judiciary