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Category Archives: Bankruptcy

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Equitable Mootness – Yet Another Due Process Violation in Chapter 11 Proceedings

Posted in Bankruptcy, Due Process
Every litigant faces the possibility of trial and appeal. But Wall Street finds that risk annoying. So, bankruptcy courts invented the doctrine of “equitable mootness” to cut off appeals. The doctrine is still alive and kicking in the east coast circuits, but took at least a flesh wound in a recent Ninth Circuit ruling. The… Continue Reading

Lyondell Claims Benzene Claims are Barred by Prior Chapter 11 Plan and Injunction

Posted in Asbestos Bankruptcy, Bankruptcy, Benzene, Constitutional Law/Mass Tort Law, Litigation Industry
Defendants related to uber-sized Lyondell Chemical are now seeking to use a recent chapter 11 injunction to try to bar claims that benzene caused a blood cancer. The defense motion makes no mention of the chapter 11 proceeding including any “futures representative” type of person acting on behalf of future claimants. The motion also makes… Continue Reading

SCOTUS and Bankruptcy Court Jurisdiction Regarding Adjudication of Claims Related to Mass Tort Bankruptcies

Posted in Asbestos Bankruptcy, Bankruptcy, Litigation Industry, Mass Tort Issues
The Stern related opinions continue from SCOTUS. It will be interesting to see the impact for mass tort bankruptcies. A May 26, 2015 article from LAW360 explains: “Law360, New York (May 26, 2015, 10:33 AM ET) — The U.S. Supreme Court ruled Tuesday that bankruptcy courts have the authority to make final decisions on certain… Continue Reading

Update on the Federal Loss on GM – and Relevance to the GM Switch Issues

Posted in Bankruptcy, GM Bk, Litigation Industry, Mass Tort Issues
 April 30, 2014 news reports say that the US treasury now reports losing $11.2 billion on the GM takeover fiasco, and has written off its “investment” in old GM.  (See below for cut and paste.) The government obviously went into the “deal” knowing that the big picture was that jobs and industries would be saved, but… Continue Reading

GM’s Ignition Switch Recall – A Prime Example of Why It’s Not Sound Policy to Let Bankruptcy Courts Cut Off Tort Claims

Posted in Bankruptcy
By itself, the 2009 GM bankruptcy was a poster child for some of the many flaws in chapter 11 and bankruptcy law as used to handle contingent liability claims. See, for example, here, here, here, and here. That said, Bankruptcy Judge Gerber sometimes did draw a due process lines in terms of cutting off claims without notice and… Continue Reading

Oklahoma Passes Legislation Aimed at Creating Intersections Between the Tort System and the Bankruptcy Claiming System

Posted in Bankruptcy
Asbestos defendants continue to convince state legislatures to create some long overdue intersections between personal in jury claims in te the tort system and in the bankruptcy trust claiming system. The most recent outcome is in Oklahoma, where legislators approved this new statute.  The governor is expected to sign the bill.  The new statute is… Continue Reading

A Canadian View on the Enforceability of Contract Clauses that Operate Upon Insolvency or the Filing of a Bankruptcy Petition

Posted in Bankruptcy
Bankruptcies are frequently used to resolve mass tort situations. In some instance, a bankruptcy is fairly foreseeable as tort claims grow. Therefore, a pertinent question is whether or when bankruptcy courts will enforce or strike out contract clauses that purport to operate upon the filing of bankruptcy petition or insolvency. A recent case in Canada… Continue Reading

Will Bankruptcy Legislation Oust the Bankruptcy Courts of Delaware and New York

Posted in Bankruptcy
The bankruptcy courts of Delaware and New York dominate major chapter 11 cases, to the great delight of lawyers in those areas. But the work of the courts has been oft-criticized as far too pro-debtor, with the Delaware courts receiving especially blunt criticism. See Professor Lynn LoPucki’s 2005 book: Courting Failure: How Competition for Big Cases… Continue Reading

MF Global’s $ 600 Million Fiasco – The Latest Example of the Intersections Between Bankruptcy and Mass Claiming – See Dealbook for Specifics

Posted in Bankruptcy
The MF Global fiasco has left $ 600 million missing, and 38,000 customer accounts being scrutinized as to what happened. Tort and contract claims will follow, and/or are pending, subject to the bankruptcy stay of all litigation. What to do? Once again, as is true for many mass claims, chapter 11 is the primary vehicle… Continue Reading

Global Forum Shopping – Shipping Companies Seek Shelter in U.S. Chapter 11 Proceedings

Posted in Bankruptcy
U.S. bankruptcy  judges purport to wield vast power, such as issuing purportedly global stays of all litigation pending against a debtor. Some would say that due process is improperly tossed out the door in such proceedings, but others would argue to the contrary. The market place suggests that the broad orders are desired by debtors,… Continue Reading

WaMu Bankruptcy Judge on Possible Insider Actions in a Chapter 11

Posted in Bankruptcy
I’m shocked, just shocked, that a judge could think inside information and lack of disclosure could have tainted a chapter 11 case (sarcasm intended). The opinion is here  –  a Dealbook summary is below.  SEPTEMBER 14, 2011, 9:28 PM Judge Says Hedge Funds May Have Used Inside Information By CHARLES DUHIGG and PETER LATTMAN There have long been whispers… Continue Reading

Will Mass Tort Claims Take Major Banks Into Insolvency ?

Posted in Bankruptcy
Will litigation liabilities overwhelm Countrywide and/or Bank of America and force one or more entities into insolvency? That’s the question posed by Steven Davidoff in a DealBook post which presents  various allegations drawn from AIG’s recent lawsuit against the bank. AIG’s complaint details various inter-bank transactions which could be characterized as fraudulent transfers.  Wall Street… Continue Reading