by: Ryan J. Dattilo
U.S. Bankruptcy Court (D. Del.); Wilmington
Grant L. Cartwright
U.S. Bankruptcy Court (D. Del.); Wilmington
It is well established by the Delaware courts that the creditors of an insolvent corporation have standing to bring a breach of fiduciary duty derivative suit against directors. [1] The basis for such standing heavily relied on “equitable considerations.” [2] Many scholars—and even some courts—have assumed that such derivative standing extends to the creditors of a limited liability company (LLC). According to a recent Delaware Chancery Court ruling, they were wrong.
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Schulte Roth & Zabel LLP; New York
Joseph E. Bain
Schulte Roth & Zabel LLP; New York
The Fifth Circuit Court of Appeals, on Oct. 19, 2010 corrected a bankruptcy court’s calculation of a secured lender group’s superpriority administrative claim more than two years after consummation of the debtors’ chapter 11 reorganization plan. In doing so, the court reconciled the rationale for giving secured lenders “adequate protection” with the “fallback” superpriority administrative claim of § 507(b) of the Bankruptcy Code.
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Remember, the American Bankruptcy Institute's Annual Spring Meeting is less than two weeks away. The scheduled events are too exciting to miss. If you have not done so, click here to sign up now. While you're there, make sure to stop by the membership booth for tutorials and information on some of ABI's newest products, a phone charging station, free internet access and your chance to win a Kindle®! You can also network and get more involved with the Secured Credit Committee by joining us at the following scheduled events:
April 1st, 8:00 a.m.: The Committee will hold a breakfast in the Potomac One room. Come join us, meet your fellow committee members and discuss the year ahead.
April 1st, 4:15 p.m.: The Secured Credit/Asset Sales joint presentation will be on plan sales vs. section 363 sales. Judge Isicoff (Miami), Peter Kaufman, Stephen Lerner and Robin Phelan are all speaking at the presentation.
All are welcome! We hope to see you at the Spring Meeting!
At the Paskay Seminar on Bankruptcy Law and Practice earlier this month there was a session of interest to the committee titled "ABC vs. Chapter 11: The Use of Assignments for the Benefit of Creditors as an Alternative to Chapter 11 Cases." The panel discussed the powers and duties of the assignee and their right to conduct business; advantages, disadvantages and practical considerations; and the formal requirements of assignments. The session was moderated by Geoffrey L. Berman of Development Specialists, Inc. in Los Angeles. The panel included Michael R. Stewart of Faegre & Benson LLP in Minneapolis and Daniel A. Zazove of Perkins Coie LLP in Chicago.
ABC vs. Chapter 11: The Use of Assignments for the Benefit of Creditors as an Alternative to Chapter 11 Cases
Last month at VALCON2011 in Las Vegas there was a session of interest to the committee titled "Cost of Capital: An Analysis of Courts' Interpretations." The panel discussed cram down interest rates, the value of collateral and the cost of capital for a business enterprise. Grant W. Newton of Pepperdine University and AIRA in Medford, Ore. served as the Presiding Officer for the panel, and the session was moderated by Robert Parrino of University of Texas at Austin in Austin, Texas. The panel included Roger J. Grabowski of Duff & Phelps LLC in Chicago and Bernard Pump of Deloitte Financial Advisory Services, LLP in Chicago.
Cost of Capital: An Analysis of Courts' Interpretations
To view all conference materials related to the Secured Credit Committee, click here.
