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Second Circuit Affirms Designation of Secured Lender's Vote and Effective Cram Down
The U.S. Court of Appeals for the Second Circuit, on Dec. 6, 2010, summarily affirmed a bankruptcy court's designation of a secured lender's vote on a reorganization plan in a two-page order, effectively enabling the debtor to cram down the lender's claim. In re DBSD North America, Inc., __ F.3d __, 2010 WL 4925878 (2d Cir. Dec. 6, 2010) (held, lower courts did not err in designating secured lender's vote, but “plan violated the absolute priority rule” in its treatment of a separate unsecured creditor). As a result, the secured lender who bought all of the debtor's senior first lien secured debt at par will be paid only interest over a period of four years before its loan matures. See In re DBSD North America, Inc., 419 B.R. 179, 207-08 (Bankr. S.D.N.Y. 2009) (confirming debtors' proposed plan). According to the Second Circuit, an “opinion” explaining its reasoning “will follow in due course.”
The DBSD ruling is important to would-be acquirers of Chapter 11 debtors. As shown below, a lender's so-called “loan to own” strategy may still be valid, but acquirers cannot overreach. Consistent with other decisions discussed below, DBSD means that a competitor's manipulating the reorganization process to block a reorganization or to destroy the debtor's business will not work.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
CLE Shouldn't Be the Only Mandatory Training for Attorneys
Each stage of an attorney's career offers opportunities for a curriculum that addresses both the individual's and the firm's need to drive success.
Discovery of Claim Construction and Infringement Analysis May be Compelled Prior to a Markman Hearing
A defendant in a patent infringement suit may, during discovery and prior to a <i>Markman</i> hearing, compel the plaintiff to produce claim charts, claim constructions, and element-by-element infringement analyses.