Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Acquisition of Claims for Plan Control
The United States Court of Appeals for the Ninth Circuit recently provided additional guidance to creditors seeking to block confirmation of a plan by acquiring claims against the debtor. In Pacific Western Bank, et al. v. Fagerdala USA-Lompoc, Inc. (In re Fagerdala USA-Lompoc, Inc.), 891 F.3d 848 (9th Cir. 2018), the court held that a bankruptcy court may not designate claims under section 1126(e) of the Bankruptcy Code for bad faith simply because a creditor offers to purchase only a subset of available claims to block confirmation of a plan or because blocking confirmation will adversely impact the remaining creditors.
Relying heavily and expanding on the court's twenty-year old decision in Figter Ltd. v. Teachers Ins. & Annuity Ass'n of Am. (In re Figter, Ltd.), 118 F.3d 635 (9th Cir.), cert. denied, 522 U.S. 996 (1997), the court held that “[a]t a minimum, there must be evidence that a creditor is seeking 'to secure some untoward advantage over other creditors for some ulterior motive.'” 891 F.3d at 854, citing Figter, 118 F.3d at 639.
The Case
In Fagerdala, Pacific Western Bank, which held the senior secured claim against the debtor through its wholly owned subsidiary Coastline RE Holdings Corp. (Pacific Western), had its votes designated in respect of unsecured claims it acquired to block confirmation of the debtor's plan. The court held that “the bankruptcy court erred when it refused to analyze whether Pacific Western acted under an 'ulterior motive', beyond its 'mere enlightened self interest' in protecting its secured claim.” 891 F.3d at 852.
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
Law Firms are Reducing Redundant Real Estate by Bringing Support Services Back to the Office
A trend analysis of the benefits and challenges of bringing back administrative, word processing and billing services to law offices.
New York's Latest Cybersecurity Commitment
On Aug. 9, 2023, Gov. Kathy Hochul introduced New York's inaugural comprehensive cybersecurity strategy. In sum, the plan aims to update government networks, bolster county-level digital defenses, and regulate critical infrastructure.
Bit Parts
Summary Judgment Denied Defendant in Declaratory Action by Producer of To Kill a Mockingbird Broadway Play Seeking Amateur Theatrical Rights
Risks of “Baseball Arbitration” in Resolving Real Estate Disputes
“Baseball arbitration” refers to the process used in Major League Baseball in which if an eligible player's representative and the club ownership cannot reach a compensation agreement through negotiation, each party enters a final submission and during a formal hearing each side — player and management — presents its case and then the designated panel of arbitrators chooses one of the salary bids with no other result being allowed. This method has become increasingly popular even beyond the sport of baseball.
Disconnect Between In-House and Outside Counsel
'Disconnect Between In-House and Outside Counsel is a continuation of the discussion of client expectations and the disconnect that often occurs. And although the outside attorneys should be pursuing how inside-counsel actually think, inside counsel should make an effort to impart this information without waiting to be asked.