Weekly Blog Roundup on Bankruptcy-Related Topics for the Week Ended 11/11/05
Below are notable blog posts on topical bankruptcy issues of interest to the bankruptcy litigator and practitioner for the week ending 11/11/05. Enjoy! Meanwhile, Cassie and I are off to LexThink's BlawgThink 2005 Conference, described as the "first of its kind two-day event brings together the largest group of legal bloggers ever assembled for two days of education, innovation, fellowship and fun."
Most importantly, remember our veterans today, the 87th anniversary of the end of the war that killed or wounded 37 million and was naively believed to be the "war to end all wars," only to be cruelly followed by a punishing flu pandemic the following winter than killed another between 20 and 40 million people. We, as Americans, should be most thankful for our veterans' achievements, and our founders' vision.
SCOTUSblog reports on the upcoming oral argument in Central Virginia Community College v. Katz, with a link to the briefs for the petitioners and respondents, and an excellent summary of the key issues in the case. This blog post states that "most of the debate on Monday, however, may center on whether the Court should reach the sovereign immunity question at all." This remark appears to have been on target based on Judge Benjamin Goldgar's report at last week's NCBJ presentation on colliding state and federal spheres of jurisdiction in which he stated that it appears that the US Supreme Court "dodged another bullet" here and may avoid deciding the question altogether. Apparently, a great deal of the oral argument was spent on the "waiver" issue. More on this argument later when the transcript is released, but here's a prior post on a very interesting brief filed by the respondents in support of abrogation, to which the petitioners did not respond in kind.
The Delaware Litigation Blog reports on a recent Delaware case holding that "the presumption of the Business Judgment Rule (BJR) was not rebutted and breach of fiduciary duty claims were thus defeated in Blackmore Partners, L.P. v. Link Energy, LLC. In this case Vice Chancellor Lamb granted summary judgment in favor of defendants based on the failure to overcome the presumptions of the Business Judgment Rule for claims of breaches of fiduciary duties arising out of the sale of assets at a price likely to yield zero value to the equity owners of the selling company. The case includes a discussion of the duties of directors where the company is in the 'zone of insolvency' as well as three tests that are used to determine insolvency for those purposes."
Houston's Clear Thinkers writes about "GM's Enronesque experience" following GM's announcement of a planned restatement of financial results for 2001.
PointofLaw Forum reports on the bankruptcy filing of ASARCO, "one of the nation's oldest mining concerns (the old American Smelting & Refining), which is primarily a copper-mining company but has operated in asbestos as well." This blog also contains an interesting post on Daubert and FRE 702, noting that "it is obviously illegitimate for federal courts to rely on language from Daubert, or even Joiner or Kumho Tire--each of which interpreted OLD Rule 702, when there is contradictory, stricter language from NEW Rule 702."
The Pierce Law IP News Blog provides a nice summary of issues faced in valuing the IP of bankrupt businesses.
Ross Barr of Jones Day writes an article entitled "Charter Exculpatory Provisions Preclude Bankruptcy Trustee from Suing on Breach of Duty of Care," in which he discusses a Second Circuit case, Pereira v. Farace, 413 F.3d 330 (2d Cir. 2005), "which held that a bankruptcy trustee could not prosecute a corporate debtor's claims against its former directors for breach of the duty of care where the corporation's charter contained a provision shielding its directors from such liability."
Bankruptcy Information Blog provides a link to a good news article by William Edy in Southern Florida's News-Press explaining the homestead exemption and the split in recent bankruptcy court decisions (reported here also) on how to interpret the relevant statutory provisions. This is the third of three articles on BAPCPA issues of interest to consumers.
The Bankruptcy Lawyers Blog and Bankruptcy Search Blog report separately on the IRS's recent release summarizing tax responsibilities of debtors under BAPCPA's new provisions. The Bankruptcy Lawyers Blog also reports on the potential for attorney liability under BAPCPA's new section 707(b)(4), citing to a recent ABA report.
Appellate Law & Practice reports on a First Circuit decision "which affirmed the Bankruptcy court's denial of a 'petition to convert these proceedings from Chapter 7 to Chapter 13, based on its determination that Marrama had attempted to conceal assets from creditors.'"
Cracking the Code reports on a case (reported here) from the 7th Circuit that "questions the validity of such trading orders and suggests that affected parties are entitled to adequate protection or a bond to protect them against losses they suffer as a result of trading restrictions."
The Daily Blog reports a story that "the United Auto Workers and five other unions are forming a coalition covering about 33,650 Delphi workers to join in a 'strong, coordinated fight' against the auto-parts maker."
The Bankruptcy Blog cites to a news article from Dow Jones stating that Morgan Stanley "expects to take up to $250 million in charges amid a rash of bankruptcy filings stemming from a change in the law." Guess that came as good news with the stock up 48 cents that day.
The Bankruptcy In$ider reports:
A long-awaited independent examiner's report has concluded that officials at the now-defunct Gitto/Global Corp. of Lunenburg, Mass., created fake customers and sales as part of an extensive fraud scheme that involved millions of dollars and included paying for personal expenses with corporate money.
"The evidence that the Gitto principals engaged in substantial misconduct for the purpose of defrauding Gitto/Global's lenders and other creditors is overwhelming," said the 154-page report by Charles L. Glerum of Boston law firm Choate, Hall & Stewart LLP, released last week and filed on the Web site of the U.S. Bankruptcy Court for the District of Massachusetts in Worcester. "There is further substantial evidence that the Gitto principals misappropriated substantial sums from Gitto/Global for their personal use or benefit."
The Bankruptcy Blog also cites to an Oregon PBS report that "[a] federal bankruptcy in Portland told the Vatican Wednesday that it has no standing to intervene in the bankruptcy case of the Archdiocese of Portland" and to a report from the Chicago Sun Times on expected challenges by rank and file employees of United to a "possible payout of $300 million in stock for 400 United managers after the airline emerges from bankruptcy."
The Boxing Blog notes that former heavyweight champ Riddick Bowe filed a chapter 11 petition "listing more than $4.1 million in claims against him." It reported that, "[a]ccording to a statement, the filing was related to 'business transactions and related litigation, and liquidity issues.'" The post further noted that "Bowe, 38, served 17 months in federal prison for kidnapping his ex-wife and children from their home. Since his release in 1998, Bowe has fought and won twice but the belief that he has suffered some degree of brain damage has made it difficult for him to get a boxing license."
© Steve Jakubowski 2005
Thanks for the mention.