Here’s an aggregation of some of my Twitter posts from May 7-10, 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.
May 7 – 10, 2018
BK RELATED CASES:
- 9th Cir: “We hold that the trustee’s adversary complaint contesting the basis for Lee’s exemptions qualified as an objection to those exemptions under Rule 4003.” In re Lee
- BAP-9th analyzes UCC Section 2-501 and whether a special property interest exists in a “good” or a “future good” and concludes “that a good does not need to be complete in order to be an existing good.” In re Phoenix Heliparts Inc
- D-ME in Lincoln Paper litigation by the Creditors’ Committee analyzes board duties under Delaware law, dismisses duty of loyalty claims, but sustains duty of care claims vs. board members even though they abstained from the vote that authorized distributions of insurance proceeds to shareholders. Official Committee of Unsecured Creditors v Meltzer
- B-SD-CA dismisses involuntary petition for failure to prove Dbtr not paying debts as they gen. come due, but refuses to impose fees and costs because it was a close call. In re KP3 Endeavors Inc
- B-ND-IL: “[N]on-debtor substantive consolidation is not a remedy available to a court sitting in the 7th Cir., [but] even [it] could be considered, it is not clear every creditor of Defendants received notice of the Trustee’s request.” In re Concepts America Inc
- B-MT: “The Counterclaims [for postpetition breach of a ‘Bid Agr.’] are not ‘interests’ from which Movants were protected under 363(f) & the Sale Order.” Case provides an interesting analysis of successor liability “interests” and other claims. In re Mountain Divide LLC
- B-SD-NY: Environmental claimants are not like the ignition switch claimants and so due process rights weren’t violated. “This case is far more similar to Chemetron where, in the context of tort claims for damages arising out of exposure to toxic substances, the Ct found that the plaintiffs were unknown creditors because their identities were not reasonably ascertainable to the debtor.” In re Motors Liquidation Company
- B-ED-PA: While the Trustee’s criticism of the tax return as probative evidence is well taken, the document is nonetheless the only evidence in the record re Incare’s balance sheet position in 2010., so the trustee failed to meet its burden in this fraudulent transfer action. In re Incare LLC
- B-SD-WV: I like this quote: “The good faith standard also ‘protects the jurisdictional integrity of the bankruptcy courts by rendering their powerful equitable weapons (i.e., avoidance of liens, discharge of debts, marshaling and turnover of assets) available only to those debtors and creditors with clean hands.” Court ultimately refuses to dismiss ch 11, stating “the Court lacks any basis to peremptorily dismiss this case based on the current record.” In re Jade Investments LLC
INTERESTING CASES FROM ILLINOIS COURTS & UNITED STATES SUPREME COURT:
- SCOTUS: The SCOTUS Opinion in Oil States reminds that the unconstitutional conditions doctrine “prevent[s] the Government from using conditions to produce a result which it could not command directly.” Oil States Energy Services LLC v Greenes Energy Group LLC
- 7th Cir: “At oral argument, HH described its claim as a ‘content-based, prior restraint, as-applied claim.’ Combining these various terms from First Amendment jurisprudence into a single claim requires some unpacking. We begin with the framework for analyzing zoning regulations of sexually oriented adult businesses under the First Amendment. . . . A zoning measure can be consistent with the First Amendment if it is likely to cause a significant decrease in secondary effects and a trivial decrease in the quantity of speech.”HH-Indianapolis LLC v Consolidated City of Indianapolis and County of Marion Ind
LAW RELATED ARTICLES:
- Attorney Client Privilege: From Opinion: “To paraphrase the philosopher Finn: you won’t know about this case w/out you have read my Opinion denying in part a motion to dismiss, but that ain’t no matter.” Court Of Chancery Examines Exceptions To The Attorney-Client Privilege, by Carl Neff of Fox Rothschild
- Bankruptcy Exemptions: “In the circuit court, pro bono co-counsel for the debtor was Eugene Wedoff, the immediate past president of American Bankruptcy Institute and a former bankruptcy judge in Chicago.” Three Circuits Approve Extraterritorial Application of a State’s Exemptions, via Rochelle’s Daily Wire
- Ch. 13 Fees: Chicago Begins To Rethink How Bankruptcy Lawyers Get Paid, by Pro Publica Illinois
- Equity in Bankruptcy: “Pareto improvements appear in the stated tests governing critical vendor payments and other departures from standard priority rules, incl. roll-ups and substantive consolidations.” Inequality and Equity in Bankruptcy Reorganization, by Profs. Richard Hynes and Steven Walt, via SSRN
- GOB Sales: We visited 3 Toys R Us stores that are about to shut down — and it was a depressing look at a business at its end, via Business Insider
- Lender’s Consent: “Under English law: Ct not open to lender’s refusing to consent to the disposal of the property on grounds not based on its sale price.” On what basis can a secured lender refuse consent to a disposal when its consent is “not to be unreasonably withheld”?, by Tanya Alfille, Felicity Ewing, and Thomas Leyland of Dentons
- Litigation Funding: Federal Judge Orders Litigation Funding Disclosure to the Court, Rather than to Opposing Parties, by Kevin LaCroix of The D&O Diary
- Manipulating the Verdict: “We document evidence that firms systematically increase specialized, locally targeted advertising following the firm being taken to trial in that given location – precisely following initiation of the suit.” Buying the Verdict, by Profs. Lauren Cohen and Umit G. Gurun, via SSRN
- Partnership Admissions: “Though 96% of the limited partner favored replacing the general partner, and the original general partner agreed to succession, precise steps of the limited partnership agreement weren’t followed, so admission of new general partner is invalid.” Chancery Finds That GP Was Not Properly Admitted Under LP Agreement, by Carl Neff of Fox Rothschild
- Personal Jurisdiction / Forum Non-Conveniens: Personal Jurisdiction/Forum Non Conveniens – The World in US Courts: Spring 2018, by Orrick, Harrington & Sutcliffe
- Retail Leases: Lurking in the Lease: Unexamined Risks Could Worsen the “Retail Apocalypse”, from ABL Advisor
- Stark / Anti-Kickback: Where does the law against kickbacks not apply? At your hospital, via WSJ
- Trademarks in China: “We get emails from stunned companies reporting to us that they have just learned that their Chinese factory has registered “my trademark” or “my patent” in China and is selling our product for 25-75% less.” Chinese Suppliers: Competitors not Friends, via Dan Harris of China Law Blog
- Weinstein Co. Bankruptcy: Best summary I’ve read so far of the sale hearing. Judge Approves Weinstein Co. Sale to Lantern Capital, via Variety
DISTRESSED iNDUSTRY NEWS:
- Bond Trading: Bond trading: technology finally disrupts a $50tn market, via FT
- Butter & Milk: Author of “Butter: A Rich History” reviews the new release, “Milk!” by Mark Kurlansky. ‘Milk!’ Review: Food History Worth Nursing, via WSJ
- Cord-Cutting: Cord-cutting’s unexpected victim: high-yield bond investors. Cord-Cutting Pain Spreads to High-Yield Bond Market, via WSJ
- Dairy Distress (1): 11 Wisconsin Dairies Lose Contracts with Arla, via Dairy Herd Management
- Dairy Distress (2): The carnage in dairy continues, spreading to Tier 1 and 2. Idaho farm trucking company seeks bankruptcy protection, via Capital Press
- Doomsday Delayed:“Michael Eisenband, co-head of the turnaround consulting unit at FTI Consulting Inc., sees the long-predicted spike in defaults fully materializing in 2020: ‘The surge will trail nine months to a year behind the point when credit markets tighten, with companies looking to refinance about 18 months before they hit the wall, said Eisenband.’ ” Doomsday for Distressed-Debt Issuers Has Been Rescheduled, via Bloomberg
- Oil & Gas Royalty Interests: Fifth Circuit Issues Decision Concerning Overriding Royalty Interests and Louisiana Oil Well Lien Act Claims, by Ed Ripley of King & Spaulding
- Politics: The race is shaping up to be a great race to follow: Ohio primary elections 2018: the race to replace Gov. John Kasich is wide open, via VOX
- Retail and the Amazon Effect: Is the beauty industry ‘Amazon-proof’?, via FT
- Sanctions and Dictators: A New Way to Impose Financial Sanctions on Dictators, by Univ. of Oxford Law’s Mito Gulati and Ugo Panizza
- Sanctions and Metal Prices: Why makers of aluminum products and large multinational manufacturers are fretting over wild swings in metal prices. What’s Spooking Boeing and Ford? Wild Aluminum Prices, via WSJ
- Solar: A fast solar ramp in Hawaii can save $3-7 billion between 2020 and 2045, per Rhodium Group, via PV Magazine
- Sport Stadiums: How Cities Fell Out of Love With Sports Stadiums, via Governing
LIFE:
- Burning Man Festival: “Harvey & the SF Cacophony Society-a group devoted to public pranks-moved the ceremony to NV, and now it’s an annual festival for 70,000.” How Larry Harvey, the Founder of Burning Man, Taught America to Experiment, via New Yorker
- Iranian Discontent (1): “In my 2 decades of reporting on Iran for Financial Times, I cannot recall such high a level of anxiety & disappointment among the biz community, politicians, artists & ordinary people.” Gradual reform fails to stem the pessimism of the Iranian public, via FT
- Iranian Discontent (2): “The sense of crisis in Iran runs deep and wide. The economy is in free fall. The currency is plummeting. Rising prices are squeezing city dwellers…. There is even talk of a military takeover.” Iranians Fear Deeper Crisis as Trump Ends Nuclear Deal, via NYT
- Jack Ma in Israel: Alibaba CEO Jack Ma at Tel Aviv Univ. commencement exercise. “Coming to Israel is a dream that I had for many years. . . . I should come here more and more. You should not read about Israel, you should come here, feel it, touch it.”, via YouTube
- Marxism and China: “Amid China’s capitalism-fueled economic miracle, Xi Jinping is promoting Karl Marx as an inspiration for national prosperity.” Xi Capitalizes on Marx’s Legacy to Rally China Around Communist Party, via WSJ
- Pain Management: “You need to respect the pain, because what it’s telling you is to stop. . . . Tiger Woods takes ibuprofen to prevent back pain. But for weekend duffers, this is one of the rare things Woods does on the golf course that experts would advise against copying.” Tiger Woods Takes Ibuprofen to Prevent Back Pain. Should You?, via WSJ
- Poker as a Profession: Writer Picks Up Poker For Book Stunt, Wins So Much Money That The Book Is On Hold, via Deadspin
- Spy vs. Spy: Suspect allegedly provided information to Beijing that helped it identify and kill U.S. informants. Former CIA Officer Charged With Conspiring to Commit Espionage for China, via WSJ
- Success Predictors: “Profs Duckworth and Milkman are using push notifications and micro-rewards to test the theory that grit can be cultivated in gym goers to stop them slacking off.” True grit is the predictor of success, via FT
Thanks for reading!
©2018, Steve Jakubowski