In a unanimous decision affirming the Sixth Circuit, the Supreme Court held that creditors have 14 days to appeal a bankruptcy court’s denial of relief from the automatic stay. In one of the term’s first decisions, Justice Ginsburg’s opinion in Ritzen Group, Inc. v. Jackson Masonry, LLC agreed with Judge Thapar’s conclusion that the denial … Continue Reading
Under the Bankruptcy Code, a reorganization plan may be approved if (1) proposed in “good faith” under § 1129(a)(3), and (2) accepted by at least one class of creditors whose interests are impaired by the plan, see 11 U.S.C. § 1129(a)(10). In Village Green I, GP v. Fed. Nat’l Mortgage Assoc., the Sixth Circuit affirmed … Continue Reading
We all know that courts want to read contracts as a whole to effectuate the intent of the parties. This case provides a textbook illustration of the principle. In a case arising from the bankruptcy and technology context, Cyber challenged the district court’s interpretation of its contractual agreements with Priva. The dispositive question was whether … Continue Reading
Last week, in Wellness Int’l Network Ltd. v. Sharif, No. 13-935 (May 26, 2015), the Supreme Court held that a bankruptcy court can enter final judgment on “non-core” claims under 28 U.S.C. § 157 if the parties consent to that court’s jurisdiction. It overturned a decision by the Seventh Circuit that relied heavily on the … Continue Reading
In a split decision issued late last week, the Sixth Circuit overturned a Michigan district court’s disposition of a tort suit from North Carolina arising out of allegedly faulty breast implants. In noting that “a venue transfer is not alchemy,” the court also construed complex choice-of-law issues in light of the Bankruptcy Code. Over 20 … Continue Reading
In a sternly-worded, sixty-page opinion last week, the Sixth Circuit’s Bankruptcy Appellate Panel affirmed a bankruptcy court’s $200,000 sanctions order against an attorney that arose from a plethora of litigation over an ultimately disallowed claim in what became a complicated bankruptcy. We have previously posted about the Circuit’s trend in upholding sanctions, and this bankruptcy … Continue Reading
On January 16, the Sixth Circuit issued a decision in an appeal by Chrysler dealerships that were closed in the process of Chrysler’s bankruptcy in 2009 but that met with success in federally-mandated arbitration aimed at reinstating and reopening those dealerships. The conflict underlying the case started when Chrysler closed 789 dealerships during its 2009 … Continue Reading
The Supreme Court granted cert last Friday in the case of Bullard v. Hyde Park Savings Bank, in which the First Circuit held that an order denying confirmation of a reorganization plan is not a “final judgment” and therefore not appealable. The First Circuit’s decision agreed with five other circuits, including the Sixth Circuit, and … Continue Reading
In In re Eifler, issued yesterday, the Sixth Circuit passed up an opportunity to join the First and Fifth Circuits in adopting a “transparently plain” exception to the reliance-on-counsel defense by which a bankrupt debtor can demonstrate a lack of fraudulent intent. To qualify for the defense, a debtor must demonstrate “(1) full disclosure of all … Continue Reading
As we expected might happen in light of the Court’s previous order, the parties in the Detroit bankruptcy appeal agreed to postpone oral argument. In a letter to the parties, however, Judge Gibbons wrote that the appeals should be resolved before near the beginning of the hearing on the confirmation of the plan of adjustment. Warning … Continue Reading
Last Friday, the Sixth Circuit postponed oral argument in some of the pending cases in the appeal from the bankruptcy judge’s decision that Detroit was entitled to creditor protection under Chapter 9 of the U.S. Bankruptcy Code and could try to alter the terms of workers’ pensions. The postponement was apparently granted to allow various … Continue Reading
To a business litigator, the bankruptcy debtor’s most effective weapon is often the automatic stay, which is commonly used – or abused, depending on the perspective – to, inter alia, stay all pending litigation against the debtor and keep him in sole control of an asset, despite seeming abuses of that control. A recent decision … Continue Reading
In the aftermath of the 2009 bankruptcies of Chrysler LLC (“Old Chrysler”) and General Motors Corporation (“Old GM”), Congress enacted Section 747 of the Consolidated Appropriations Act of 2010, Pub. L. No. 111-117 (“Section 747”). Section 747 grants certain arbitration rights to dealerships that had their sales and services agreements rejected or terminated in connection … Continue Reading
The Sixth Circuit in United States v. Carroll, Case No. 10-1400, proposed a simple solution to an interesting and unusual sovereign immunity case. The case arose from the events surrounding the influx of Chapter 13 bankruptcies in 2009. Since one asset of Chapter 13 individual debtors is their tax refund, the bankruptcy judges of the … Continue Reading
In a case echoing from the high-profile automobile bankruptcies of recent years, a panel of the Sixth Circuit recently considered Rule 12(b)(6) dismissal of a class action alleging breach of fiduciary duty under ERISA as to two retirement plans for certain General Motors employees. In Pfeil v. State Street Bank & Tr. Co. (6th Cir., … Continue Reading
The FDIC has recently appealed a loss it suffered at trial on the question of whether the debtor in bankruptcy (the holding company of a failed bank) made a “commitment” to maintain the capital of its subsidiary bank under Section 365(o) of the Bankruptcy Code. After a week-long bench trial with an advisory jury, the … Continue Reading
On December 17, 2010, in In re Settlement Facility Dow Corning Trust (6th Cir., Case Nos. 09-1827/1830, Dec. 17, 2010) (PDF), a Sixth Circuit panel split over divergent arguments on two provisions present in a bankruptcy reorganization plan involving Dow Corning: 1) whether “tissue expanders” should be considered “breast implants” within the meaning of the … Continue Reading
