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133 Cards in this Set

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5 elements of a voidable preference under § 547(b)
1. to or for benefit of creditor
2. on account of an antecedent debt (owed by D before such transfer was made)
3. made while debtor was insolvent
4. within 90 days of filing (1 year for insider)
5. enables C to receive more than C would receive if (A) chapter 7, (B) transfer had not been made and (C) C received payment to the extent provided by Title 11
New Value exception to voidable preference
§ 547(C)(1) transfer was
(A) intended by D and C to be a “contemporaneous exchange for new value” and
(B) was in fact a substantially contemporaneous exchange
Ordinary Course of Business exception to voidable preference
Old § 547(c)(2) – transfer was
(A) payment of a debt incurred in the ordinary course of business or financial affairs of D and transferee;
(B) made in ordinary course of business or financial affairs of D and transferee; and
(C) made according to ordinary business terms.
New § 547(c)(2 ) – transfer was in payment of a debt incurred in the ordinary course of business or financial affairs of D and transferee; and
(A) made in ordinary course of business or financial affairs of D and transferee; or
(B) made according to ordinary business terms.
For purposes of § 547, D is presumed to be insolvent
during the 90 days prior to filing - § 547(f).
Who has burden in preference case?
T has burden of proving avoidability of transfer under § 547(b).
C (or other party in interest against whom recovery or avoidance is sought) has burden of proving nonavoidability of transfer under § 547(c).
see § 547(g)
548(a)(1)(A) fraudulent transfer
T may avoid any transfer of an interest of D in property, or any obligation incurred by D, that was made or incurred within 1 (soon to be 2) year prior to petition, if D made such transfer or incurred such obligation with actual intent to hinder, delay, or defraud any entity to which D was or became indebted.
548(a)(1)(B) fraudulent transfer
T may avoid any transfer of an interest of D in property, or any obligation incurred by D, that was made or incurred within 2 (formerly 1) year prior to petition, if D:
(i) received less than a reasonably equivalent value in exchange for such transfer or obligation, and
(ii) (I) was insolvent or became insolvent as result,
(II) was engaged in business for which remaining property was an "unreasonably small capital" or (III) intended to incur, or believed D would incur, debts that would be beyond D's abiliy to pay as they matured.
(New section relates to employment contracts.)
BFP safe harbor for fraudulent transfer
548(c) - Except to the extent that a transfer or obligation is voidable under 544, 545 or 547, transferee or obligee that takes "for value and in good faith" has a lien on or may retain interest transferred or enforce obligation incurred, to the extent such transferee or obligee gave value to D in exchange for such transfer or obligation.
New section on self-settled trusts
548(e) - Trustee may avoid any transfer of an interest of D in property made within 10 years if to self-settled trust by D who is beneficiary and transfer was made with actual intent to hinder, delay or defraud a C.
Reach back for fraudulent transfers
used to be 1 year; 2 years for cases filed after 1 yr. after enactment of 2005 amendments;
most state laws go back as far as relevant SOL
Section that generally provides that T may avoid fraudulent transfer if a C could
544(b)
548, in conjunction with 544(b) and Moore v. Bay is defective in that it
does not distinguish between present and future creditors
"Step-Transaction Doctrine"
substance over form - collapses 2 transactions into 1. example is LBO - when bank gives loan to firm, firm is solvent; when firm immediately pays out dividend, firm is not (or barely) solvent. Collapsing these 2 events permits T to go after Lender (as opposed to just (old) shareholders who received dividend. Most courts will not disallow lender from participating in estate.
When sub guarantees parent's debt and both file,
creditors of sub could try to void guarantee as fraudulent transfer.
362(a)(1) - filing operates as a stay of
the commencement or continuation of a judicial proceeding that was or could have been commenced prior to filing, or to recover a prepetition claim
362(a)(2) - filing operates as a stay of
the enforcement against D or property of the estate of a prepetition judgment
362(a)(3) - filing operates as a stay of
any act to obtain possession of property of the estate or property from the estate or to exercise control over property of the estate
362(a)(4) - filing operates as a stay of
any act to create, perfect or enforce any lien against property of the ESTATE
362(a)(5) - filing operates as a stay of
any act to create, perfect or enforce against property of the DEBTOR any lien to the extent such lien secures a prepetition claim (362(a)(4)) stays any act to create, perfect or enforce any lien against PROPERTY OF THE ESTATE (I think cut off on petition date)
362(a)(6) - filing operates as a stay of
any act to collect, assess, or recover a prepetition claim against D
362(a)(7) acts as a stay of
the setoff of any prepetition debt owing to D against any claim against D
Under 362(b)(1), the stay is not applicable to
the commencement or continuation of a criminal action or proceeding against D
Does the filing of a petition act as a stay of an act to perfect, or to maintain or continue the perfection of, an interest in property?
Under 362(b)(3), not to the extent that T's rights and powers are subject to such perfection under 546(b) or such act is accomplished within the time period in 547(e)(2)(A)
Under 362(c), the stay of an act against property of the estate, continues until
such property is no longer property of the estate
Under 362(c)(2), the stay of any act (other than against property of the estate) continues until
the earliest of the case is closed or dismissed
362(d) provides for relief from the stay
(1) for cause, including lack of AP, or
(2) with repect to a stay of an act against property, if (A) D has no equity in such property and
(B) such property is not necessary to an effective reorganization
362(e) provides that 30 days after a request for relief under 362(d),
such stay is terminated, unless the court, after notice and a hearing, orders such stay continued...
Under 362(e), the court shall order the stay continued pending the conclusion of the final hearing under 362(d) if
there is a reasonable likelihood that the party opposing relief will eventually prevail.
Under 362(f), upon request of a party in interest, the court, with or without a hearing, shall grant such relief from the stay as is
necessary to prevent irreparable damage to the interest of an entity in property, if such interest will suffer such damage before there is an opportunity for notice and a hearing under 362(d) or (e).
Who has burden of proof in a 362(d) or (e) hearing?
Under 362(g)(1) the party requesting relief has burden of proving D's (lack of?) equity in property and (2) party opposing relief has burden of proving all other issues.
362(d) is a ___ hearing
362(e) is a ___ hearing
362(d) is a lift stay (final) hearing
362(e) can be a preliminary hearing, or may be consolidated with the final hearing under 362(d)
Is there a perfection safe harbor in 547?
547(e)(2):
Perfected at time of transfer if perfection occurs within 30 days;
Perfected at time of perfection if perfected after 30 days;
Perfected immediately prior to bk filings if unperfected at later of filing and 30-day period.
1129(a)(1) requirement for confirmation
The plan complies with the applicable provisions of this title.
1129(a)(2) requirement for confirmation
The proponent of the plan complies with the applicable provisions of this title.
1129(a)(3) requirement for confirmation
The plan has been proposed in good faith and not by any means forbidden by law.
1129(a)(4) requirement for confirmation
Any payment for services or costs and expenses has been approved by the court as reasonable.
1129(a)(7) requirement for confirmation
With respect to each impaired class of claims or interests -
(A) each holder (i) has accepted the plan or (ii) will receive or retain under the plan a value, as of the effective date of the plan, that is not less than C would receive in Chapter 7

This is called the "best interests test".
1129(a)(8) requirement for confirmation
With respect to each class of claims or interests -
(A) such class has accepted the plan or
(B) such class is not impaired by the plan.
1129(a)(9)(A) requirement for confirmation
Holders of admin expenses under 507(a)(2) must receive cash (unless they agree otherwise.
1129(a)(10) requirement for confirmation
If a class of claims is impaired under the plan, at least one class of claims that is impaired has accepted the plan (excluding insiders).
1129(a)(11) requirement for confirmation
Confirmation of the plan is not likely to be followed by the liquidation, or the need for further reorganization, of D (unless proposed in plan).
1129(a)(13) requirement for confirmation
The plan provides for the continuation of payment of all retiree benefits at the level established pursuant to 1114 prior to confirmation, for the duration of time D has obligated itself to provide such benefits.
1129(b)(1) requirement for confirmation
Notwithstanding section 510(a) (which states that a subordination agreement is enforeceable), if all of the applicable rquirements of 1129(a) other than (8) are met, the court shall confirm the plan if it does not distriminate unfairly, and is fair and equitable, with respect to each class of claims or interests that is impaired under, and has not accepted, the plan.
1129(b)(2)(A) - For purposes of cramdown, "fair and equitable with respect to a class" includes the following requirements with respect to a class of secured claims -
the plan provides:
(i)(I) C retains the liens securing such claims, whether the property is retained by D or transferred, and
(II) C receives deferred cash payments totaling at least the allowed amount of such claim, of a value, as of the effective date of the plan, of at least the value of such holder's interest in the estate's interest in such property;

(ii) for the sale of any property, with C's liens to attach to the proceeds; or
(iii) for the realization by C of the "indubitable equivalent of such claims."
1129(b)(2)(B) - For purposes of cramdown, "fair and equitable with respect to a class" includes the following requirements with respect to a class of unsecured claims -
(i) the plan provides that each holder receive or retain property of a value, as of the effective date, equal to amount of claim or
(ii) the holder of any junior claim will not receive or retain any interest.
1129(b)(2)(C) - For purposes of cramdown, "fair and equitable with respect to a class" includes the following requirements with respect to a class of interests -
(i) plan provides that each holder receive or retain property of a value, as of the effective date, equal to the greatest of the allowed amount of any fixed liquidation preference, any fixed redemption price or the value of such interest; or
(ii) the holder of any junior interest will not receive or retain anything. [I think this provision refers to preferred stock.]
1129(c) states that
court may only confirm one plan (unless confirmation order has been revoked under 1144). If 1129(a) and (b) are met for two plans, court shall consider the preferences of creditors and equity security holders in determining which plan to confirm.
Under section 361, AP may be provided by
(1) cash payment(s),
(2) additional or replacement liens,
(3) granting such other relief, other than compensation allowable under section 503(b)(1) as an administrative expense, that would result in the realization by the creditor of the indubitable equivalent of the creditor's interest in such property.
Section 363(b)(1) provides that
the trustee, after notice and a hearing, may use, sell, or lease, other than in the OCB, property of the estate.
Section 363(c)(1) provides that
the trustee may enter into transactions, including the sale or lease of property of the estate, in the OCB, without notice or a hearing, and may use property of the estate in the OCB without notice or a hearing.
Under section 363(c)(2), the trustee may not use, sell, or lease cash collateral under (c)(1) (in OCB) unless
(A) each entity that has an interest in such cash collateral consents or
(B) the court, after notice and a hearing, authorizes such use, sale, or lease
Section 363(e) provides that
a secured creditor can request AP
Under section 363(f), the trustee may sell property under 363(b) or (c) free and clear if
(1) permitted by applicable non-bankruptcy law,
(2) such entity consents,
(3) property is sold for an amount greater than sum of all liens,
(4) such interest is in bona fide dispute, or
(5) such entity could be compelled to accept a money satisfaction of such interest.
Can trustee use, sell, or lease property under 363 if there is an ipso facto clause?
Yes, under 363(l). No exceptions - any contractual provision that prohibits DIP's use, sale lease or property because of bankruptcy is unenforceable.
BFP exception to 363 lease or sale.
363(m) - reversal or modification on appeal of an authorization under 363(b) or (c) [don't understand why (c)] to sell or lease [but not use] property does not affect validity of sale or lease to entity who purchased or lease in good faith, unless authorization was stayed pending appeal.
Who has the burden of proof in a 363 hearing?
363(o) (soon to be (p)) -
Trustee on issue of AP.
SC on issue of validity, priority or extent of such interest.
What is 364(a) credit?
Unsecured credit or debt in OCB allowable under section 503(b)(1) as an administrative expense.
What is 364(b) credit?
The court, after notice and hearing, may authorize the trustee to obtain unsecured credit or incur debt other than under 364(a) (i.e. not in OCB), allowable under section 503(b)(1) as an administrative expense.
What is 364(c) credit?
If T is unable to obtain unsecured credit allowable under section 503(b)(1) as an administrative expense, the court, after notice and a hearing, may authorize the obtaining of credit or incurring of debt -
(1) with priority over any or all administrative expenses of the kind specified in 503(b) or 507(b);
(2) secured by a lien on property not otherwise subject to a lien; or
(3) secured by a junior lien on property that is subject to a lien.
What is 364(d) credit?
(1) The court, after notice and a hearing, may authorize the obtaining or credit or incurring of debt secured by a senior or eqal lien on property that is subject to a lien if:
(A) T is unable to obtain such credit otherwise and
(B) existing lienholder has AP.
(2) T has has B of P on issue of AP.
What is the 364(e) safe harbor?
Reversal or modification on appeal of 364 authorization does not affect validity of any debt so incurred, to [BFP].
Section 365(a) provides that
subject to court approval, T may assume or reject any executory contract or unexpired lease of D.
Under section 365(b)(1), if there has been a default in an executory contract or unexpired lease, T may not assume such contract or lease unless, at the time of assumption, T
(A) cures, or provides AP that T will promptly cure, such default;
(B) compensates, or provides AP that T will promptly compensate, any other party for any actual pecuniary loss resulting from such default; and
(C) provides AP of future performance under such contract or lease.
Under section 365(b)(2), the obligation to cure a default under 365(b)(1) does not apply to
ipso facto default
Under section 365(c), T may not assume or assign any executory contract or unexpired lease, whether or not such contract or lease prohibits or restricts assignment, if
(1)(A) applicable law excuses other party from accepting performance from or rendering performance to entity other than D, where or not contract or lesae so prohibits; and (B) such party doesn ot consent; or
(2) contract is to make a loan to D ...; or
(3) such lease is of nonresidential real property and has been terminated under applicable nonbankruptcy law prior to filing.
[(4), related to aircraft terminals is being removed]
Under 365(d)(2), when may T assume or reject ecxecutory contract or unexpired lease of residential real property or of personal property?
Any time before confirmation, but on the request of any party to such contract or lease, the court may order T to determine within a specified period of time whether to assume or reject such contract or lease.
Under section 365(d)(3), T shall perform all obligations of D arising from and after the order for relief under any
unexpired lease of nonresidential real property, until such lease is assumed or rejected.

The court may extend, for cause, the time for performance of any such obligation that arises within 60 days after the date of the order for relief, but not beyond such 60-day period.
The new section 365(d)(4) requires that an unexpired lease of nonresidential real property shall be deemed rejected if T does not assume or reject by the earlier of
120 automaticaly + 90 w/court approval. After that, only w/landlord's consent.
Section 365(e)(2) provides that section 365(e)(1) (which provides that an executory contract or unexpired lese may not be terminated or modified because of an ipso facto clause), does not apply if
(A) (i) applicable law excuses the other party from accepting performance from or rendering performance to T or to an assignee of such contract or lease, whether or not prohibitted by such contract or lease; and
(ii) such party does not consent to such assumption or assignment; or

(B) such contract is a contract to make a loan, or extend other debt financing or financial accommodations, to or for the benefit of D, or to issue a security of D.
Under section 365(f), except as provided in 365(b) and (C), notwithstanding a provision restricting assigment, T may assign an executory contract or unexpired lease only if
(2)(A) T assumes such contract or lease; and
(B) adequate assurance of future performance by assignee is provided.
Under section 365(g), except as provided in (h)(2) and (i)(2), the rejection of an executory contract or unexpired lease constitutes
a breach of such contract or lease -
(1) if such contract or lease has not been assumed, immediately before the date of the filing of the petition; or
(2) if such contract or lease has been assumed -
(A) at the time of such rejection.
Under section 366(a), except as provided in (b) [and (c)], a utility may not
alter, refuse or discontinue service to, or discriminate against, T or D solely on the basis of filing or prepetition debt.
Under 366(b), a utility may alter, refuse, or discontinue service if
neither T nor D, within 20 days after filing, furnishes adequate assurance of payment.
The new section 366(c) states
(1) a stringent definition of "assurance of payment". States that administrative expense priority shall not constitute assurance of payment.

(2) D or T have 30 days from filing to provide adequate assurance of payment.
What is the Countreyman definition of executory contract?
There is sufficient performance remaining by both parties such that if either defaults it would be a material breach.
NLRB v. Bildisco definition of executory contract
"Performance is due to some extent on both sides" - more broad than Countreyman.
What is a floating lien?
A fairly standard feature of working capital loans under which the lender is granted a security interest in A/R, inventory and other property, and proceeds thereof. The cash proceeds from the collateral become the lender's collateral.
What could be thought of as fraudulent conveyance insurance?
A fairness opinion in an M&A deal.
May a court extend the 10-day appeal period?
No. The 10-day mandate in rule 8002 is jurisdictional.
Res judicata
equals claim preclusion. Sort of like double jeopardy for civil cases - requires same parties and also bars claims that could have been litigated.
Equitable estoppel
provides relief for parties who have been induced into behavior through another party's false representation.
4041 "reorganization test" for terminating a pension plan
debtor will be unable to pay its debts and continue in business outside of chapter 11.
When a debtor seeks to terminate multiple pension plans simultaneously under the reorganization test of 4041, should a court apply the test to each plan independently, or all of the plans in the aggregate?
Aggregate - In re Kaiser Aluminum, 3rd Circuit Court of Appeals, 2006.
Summary judgement is proper when
there exists no genuine issue of material fact and the moving party is entitled to judgement as a matter of law. Fed. R. Civ. P. 56(c). Courts must draw all reasonable inferences in favor of the nonmoving party.
Holdings of Dow Corning (6th Circuit - 2006)?
1. There is a presumption that default interest should be paid to unsecured creditors in a solvent debtor case.

2. Unsecured creditors may recover attorneys' fees and expenses from a solvent debtor when they are permitted to do so by their contract and applicable law.
Are post-petition plan support agreements unlawful solicitations under 1125(b) in Delaware?
Stations Holding (2002, Walrath) - post-petition plan support agreement indicating support for a plan to implement an acquisition deemed to be "solicitation" in violation of 1125(b) - plan votes of those who executed plan support agt were voided.

NII Holdings (2002 Walrath)- plan support agreement negotiated pre-petition; some sig. pages arrived post-petition; votes voided.

Owens Corning (2006 Fitzgerald (DE)) - declined to follow earlier DE cases, followed majority of courts - 1125(b) "solicitation" should be defined narrowly (formal balloting process for official votes) - not to inhibit negotiation and settlement.
New section 1125(g) provides:
notwithstanding 1125(b), a pre-petition solicitation of a pre-pack can continue post-petition.
Holding of Century Glove (3rd. Cir. 1988)
In order to be an impermissible solicitation under 1125(b), you need a specific request for an official vote for an actual plan.
Supreme Court holding in Central Virginia Community College v. Katz, 2006
The states, through ratifying the Bankruptcy Clause in the Constitution, agreed not to assert sovereign immunity in proceedings brought pursuant to Bankruptcy laws.
Supreme Court holding in Howard Delivery Service v. Zurich American Insurance Co., 2006
An insurance company's claim for unpaid workers' compensation premiums is not entitled to priority status under 507(a)(5). Workers comp regine directly benefits employer and employee alike.
Third Circuit holding in Armstrong World, 2005
A distribution by the class of asbestos personal injury claimants to equity interest holders, over the objection of the general unsecured creditors class, violated the absolute priority rule. Property distributed was property of the estate, unlike property of secured creditors in prior cases.
The "fair and equitable" requirement of 1129(b) is
the absolute priority rule
Fifth Circuit holding in Stonebridge Technologies, 2005
Because landlord had not filed a proof of claim, the 502(b)(6) cap was not triggered. Landlord of rejected lease was permitted to retain proceeds of L/C (which exceeded cap).
Third Circuit holding in Oakwood Homes, 2006
JPM's unsecured claim based on D's guarantee of future principal and interest payments could not be discounted to PV under 502(b) after claim for postpetition interest had already been disallowed under 502(b)(2).
Must a counterparty seek stay relief prior to terminating a contract based on a valid ipso facto clause?
Yes. Mirant, 5th Cir., 2006
Fifth Circuit holding in Mirant, 2006, re: 365(e)(2)
Must use actual test of applicable law prior to giving effect to ipso facto clause.
Third Circuit holding in Seitz v. Detweiler, 2006
Deepening insolvence should be limited to situations where defendants engaged in intentional fraud. Also refused to recognized deepening insolvency as a theory of damages for negligence.
Del. Chancery Court holding in Trenwick America v. E&Y, 2006
No cause of actin for deepening insolvency exists as a matter of Delaware law.
4 factors in determining whether designation of votes under 1126(e) is warranted (according to Gerber in Adelphia, 2006)
Creditor is attempting to (i) assume control of debtor, (ii) put it out of business or otherwise gain a competitive advantage, (iii) destroy debtor out of pure malice or (iv) obtain benefits available under a private agreement with a third party which depends on the debtor's failure to reorganize. Actions just designed to receive favorable plan treatment are not grounds for "draconian" designation measure.
Main provisions of Pension Protection Act, signed into law on August 17, 2006
1. A defined-benefit plan's required contribution equals the present value of benefits earned by participants during the current year plus the amount needed to amortize any funding shortfall over no longer than 7 years.

2. Companies with seriously underfunded plans must contribute at a faster rate.

3. Airlines that have frozen their plans (stops new benefits) receive an extra 10 years to meet obligations.
In order to qualify for IRC 382(l)(5),
1. shareholders and creditors must end up owning at least 50% of the reorganized debtor's stock and in discharge of their interests and claims; and
2. stock received by creditors can only be counted toward the 50% test if it is received in satisfaction of debt that (a) had been held by the creditor for at least 18 months pre-petition ("old and cold") or (b) arose in the OCB and is held by the person who at all times held the beneficial interest in that indebtedness.
[WHAT ABOUT 5%???]
General IRC 382 rule
Change of ownership caps a company's allowed usage of NOL's against future income at an annual rate equal to the equity value of the corp. immediately prior to the change in ownership times the long-term tax exempt bond rate.
2nd Circuit holding in UCC v. PSS Steamship (In re Prudential Lines), 1991
Second Circuit upheld bankruptcy court ruling based on 362(a)(3) and 105(a) that an NOL is property of the estate and that the efforts of the debtor's non-bankrupt corporate parent to claim a worthless stock deduction (which would have rendered D's NOL's useless) violated the automatic stay. Case formed basis for NOL trading orders.
7th Circuit UAL ruling re: NOL trading order, 2005
7th Circuit overturned DC affirmation of bankruptcy court NOL trading order. UAL should have been required to post cash or a bond to protect investors against loss incurred by not being permitted to sell. Also said that reliance on 105(a) and 362(a)(3) is "weak enough to make a bond or AP undertaking obligatory before a bankruptcy judge may forbid investors to sell their stock on the market."
"Functional" approach to determining whether a contract is executory
Court looks to whether assumption or rejection of the contract would benefit the Debtor's estate, regardless of whether any material obligations remain outstanding on both sides.
2nd Circuit definition of executory contract
2nd Circuit has not expressly adopted Countreyman or functional approach (Ionosphere, 2d Cir. 1996). Courts in S.D. have used one or even both tests.
SC holding in NLRB v. Katz (1962)
NLRA employer's unilateral change in conditions of employment under negotiation violates the NLRA (unfair labor practice). Must bargain to impasse before unilaterily modifying CBA.
6th Circuit Yard-Man holding, 1983
Int’l Union v. Yard-Man, Inc., 716 F.2d 1476 (6th Cir. 1983) (retiree benefits are “status benefits” that carry an inference that they continue so long as the prerequisite status is maintained. “Thus, when the parties contract for benefits which accrue upon achievement of retiree status, there is an inference that the parties likely intended those benefits to continue as long as the beneficiary remains a retiree.”; holding that a general durational clause that refers to the duration of the agreement, as opposed to the duration of the benefits described in that agreement, does not outweigh the presumption that retiree health benefits are intended to outlast the life of a particular collective bargaining agreement; holding that the inclusion of specific durational limitations in other provisions of the collective bargaining agreement, but not the retiree benefit provisions, indicated that the retiree benefits were intended to survive the expiration of the collective bargaining agreement).
Test of standing to appeal in bankruptcy cases
"Persons aggreved" test - Standing to appeal bankrutpcy court order is limited to persons "whose rights or interests are directly and adversely affected pecuniarilily" by a bk court order (from several 3rd Circuit cases - probably applicable outside 3rd Circuit).
This is to be contrasted from broad right of participation in bankrupty cases (see 1109(b) - "A party in interest, including ... may raise and may appear and be heard on any issue in a case under this chapter."
Section 102(3) provides that
"including" and "includes" are not limiting
What are "core" proceedings
1. cases under title 11
2. proceedings arising under title 11
3. proceedings arising in a case under title 11
28 U.S.C. 1334(b) confers upon the district court
"original and exclusive jurisdiction of all cases under title 11," and "original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11."
28 U.S.C. 157(a) permits
district courts to refer most matters to a bankruptcy court.
What are "non-core" proceedings?
Proceedings related to a case under title 11.
"Cases under Title 11," as used in 28 U.S.C. 1334(a) refers to
the bankruptcy petition itself.
The term "proceeding" as used in 28 U.S.C. 1334(b) refers to
"the steps within the 'case' and to any subactio within the case that may raise a disputed or litigated matter." - anything that occurs within a case is a proceeding, including all controversies, adversary proceedings, contested matters, suits, actions or disputes.
Seminal test of determining related to jurisdiction over 3rd party claims
Pacor v. Higgins (3rd Cir. 1984) (test affirmed by S.C. in Celotex). - "the outcome of that proceeding could conceivably have any effect on the estate being administered in bankruptcy. ... An action is related to bankruptcy if the outcome could alter the debtor's rights, liabilities, options, or freedom of action (either positively or negatively) and which in any way impacts upon the handling and administration of the bankrupt estate."
3rd. Circuit holding in Fed Mogul (2002)
Bankruptcy court does not have "related to" subject matter jurisdiction to hear lawsuits by users v. automobile manufacturers (under Pacor test) even though auto manufacturers would have indemnification claims against debtor. 3rd. Circuit held that because the potential indemnification and contribution claims had not yet accrued and would require another lawsuit before they could affect FMO's bankruptcy estate, BC lacked subject matter jurisdiction over the third-party claims.

(Seeminly in contrast w/Robins v. Piccinin and Dow Corning I (6th Cir.). )
Holding of Combustion Engineering (3rd. Cir. 2004)
Third Circuit reversed Judge Judy's extension of 524(g) channeling injunction (under 105(a) to 2 former subs of Debtors. 105(a) cannot be used to achieve a result insonsistent w/BC. Since, 524(g)(4)(A) expressly provides the paramaters by which a non-debtor can be included in a channeling injunction, 105(a) cannot be used to extent to non-debtors that are not covered by express terms of 524(g).
2 holdings of NLRB v. Bildisco, 1984, and effect of 1113
1. Debtor did not violate the NLRA by unilaterally changing the terms of the CBA after filing for bankruptcy.

2. the Bankruptcy Court should permit rejection of a CBA if after careful scrutiny, the equities balance in favor of rejecting the labor contract.

Section 1113, by precluding a debtor from unilaterally changing the terms of its CBA without court approval upon entering bankruptcy, overturned the SC's first holding, while leaving the second more or less intact (from 2nd Cir. NWA 2007 opinion).
Three holdings of 2nd Circuit Northwest flight attendant decision, 2007:
1. NWA's 1113 rejection of its CBA abrogated (without breaching) the existing CBA, which thereafter ceased to exit.

2. NWA's abrogation of the CBA necessarily terminated the status quo created by that agreement, but

3. the union's proposed strike would, at present, violate the union's independent duty under the RLA to exert every reasonable effort to make an agreement, and thus may be enjoined.
SC holding in 203 North LaSalle (1999)
Even if it is assumed that there is a new value corollary to the AP rule (which would allow old equity to contribute new value and receive interest in the reorganized entity in exchange), allowing junior interest holders to have an exclusive opportunity to obtain an interest in a reorganized entity by providing new value, free from competition and without market valuation, violates the AP rule. SC rejected arguments that "on account of" means "in satisfaction of" the interset or "in exchange for" the interest and concluded that it means "because of" the interest (a causal connection).
Difference between constitutional mootness and equitable mootness
Constitutional mootness bears on the Court's power or ability to alter a particular outcome, equitable mootness refers to the Court's willingness to upset a plan of reorg based on fairness considerations. Very important factor in equitable mootness fairness consideration is whether appelant sought a stay (or expedited review).
Metromedia Fiber (2nd Cir. 2005) set forth certain examples of when non-debtor releases are appropriate
1. the estate received substantial consideration (Drexel)
2. enjoined claims were channeled to a settlement fund rather than extinguished (Johns-Manville, Robins v. Piccinin)
3. enjoined claims would indirectly impact D's reorg by way of indemnity or contribution (Robins v. Piccinin)
4. if affected creditors consent (Specialty Equip.)

Court requires unique and truly unusual circumstances, and releases must be important to the success of the plan. Court found releases illegal, but appeal was equitably moot because removing the releases would do violance to the overall arrangements.
Lowenschuss (9th Cir. 1995), Zale (5th Cir. 1995) and Western Real Estate Fund (10th Cir. 1990) hold that:
Section 524(e) limits the scope of the discharge to claims against the Debtor and therefore Bankruptcy Courts lack the power under 105(a) to discharge any claims against non-debtors (third party releases).
Rooker Feldman doctrine
bars a losing party in state court from seeking what in substance would be appellate review of the state judgment in a U.S. district court, based on the losing party's claim that the state judgment itself violates the loser's federal rights. The doctrine is confined to cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments.
Possible defense against 503(b)(9) admin claims for goods delivired within 20 days?
Cannot be paid under 502(d) until claimant returns any avoidable preferences.
Holding of Delaware Supreme Court's 2007 Gheewalla decision
(i) "creditors of a Delaware corporation that is either insolvent or in the zone of insolvency have no right, as a matter of law, to assert direct claims for breach of fiduciary duty against the corporation’s directors" and (ii) "the creditors of an insolvent corporation have standing to maintain derivative claims against directors on behalf of the corporation for breaches of fiduciary duties."
Holding of Northern Pipeline Construction Co. v. Marathon Pipe Line Co. (U.S. 1982)
Plurality opinion held that a non-Article III bankruptcy judge could not adjudicate a pre-petition contract dispute arising under state law against a party that had not filed a proof of claim and was not otherwise related to the bankruptcy proceedings.
Holding of Orion Pictures Corp. v. Showtime Networks (2nd Cir. 1993)
Related to proceedings in which the parties are entitled to a jury trial must be tried in District Court.
1129(a)(9)(B) requirement for confirmation.
Unless holder agrees otherwise, with respect to the following claims: 507(a)(4) (wage priority claims), 507(a)(5) (employee benefit plan claims), (i) if such class has accepted the plan, deferred cash payments of a value, as of the effective date, equal to allowed amount of claim or (ii) if such class has not accepted the plan, cash in full.
1129(a)(9)(C) requirement for confirmation.
with respect to a priority tax claim under 507(a)(8), each holder will receive regular installment payments in cash in full over the course of 5 years from the Petition Date and in a manner not less favorable than the most favored nonpriority unsecured claim (other than a convenience class). 1129(a)(9)(D) provides that a secured claim that fits 507(a)(8) description but for secured status is treated same way.
2000 Third Circuit case that held that avoidance actions (and the proceeds thereof) belong to pre-petition creditors and not the debtor-in-possession. The case is decided in the context of a sale of all assets of the debtor (the court held that avoidance actions were not assets of the debtor and therefore were not included in such a sale), but could be cited for the proposition that a DIP lender should not get a lien on avoidance actions or the proceeds thereof.
Cybergenics