The Aircraft and Financings
The debtors are Japanese special-purpose vehicles that each acquired and owned one Airbus A350 aircraft, which were subsequently leased by the debtors to Vietnam Airlines. The debtors did not have any employees or offices independent of their parent company, JP Lease Products & Services Co. Ltd. (JPL), a Japanese company, which manages each debtor.

To finance their acquisition of each aircraft, each debtor entered into a complex set of financing arrangements that required each debtor to lease the aircraft to intermediate sublessors, provided for a “security agent” to act on behalf of the lenders, and contained a payment priority waterfall. To secure their obligations, the debtors granted mortgages on the aircraft and assigned the security agent interests in the debtors’ rights under the transaction documents, including the leases (the “lease assets”). The security agent was provided enforcement rights in the event of a default, including the right to “dispose of” such property “at the times, in the manner, and on the terms it thinks fit.”

Obviously, then, the timeliness of a notice of appeal is critical to bankruptcy litigators. But what about the substance of the notice of appeal itself? In a case sure to keep litigators up at night, the Bankruptcy Appellate Panel for the Sixth Circuit recently underscored that what goes in a notice of appeal is often as important as its timeliness.

While state laws and procedures governing assignments for the benefit of creditors (ABCs) are varied, at least 22 states have some provision allowing for the recovery of preferential transfers. Creditors facing state preference suits often seek out bankruptcy litigators to defend these actions; however, counsel should be mindful of the divergence between available defenses under state preference laws and those under § 547 of the Bankruptcy Code. Focusing primarily on California’s ABC law, as it is arguably one of the most utilized in the nation, this article briefly describes three areas where state preference defenses differ from those available under § 547.