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The U.S. District Court for the Southern District of New York, on April 23, 2019, denied a litigation trustee’s motion for leave to file a sixth amended complaint that would have asserted constructive fraudulent transfer claims against 5,000 Tribune Company (Tribune) shareholders. In re Tribune Co. Fraudulent Conveyance Litigation, 2019 WL 1771786 (S.D.N.Y. Apr. 23, 2019). The safe harbor of Bankruptcy Code (Code) §546(e) barred the trustee’s proposed claims, held the court. Id. at 12. Based on undisputed facts, it reasoned that the debtor, Tribune Company (Tribune) “was a ‘customer’ of CTC” [Computershare Trust Company, N.A.]; CTC was “acting as Tribune’s ‘agent or custodian’ … ‘in connection with a securities contract’”; and that both entities were a “financial institution” as defined by the Code. Id. at 9. Also, held the court, “at this stage of the litigation,” allowing the trustee to amend his complaint “would result in undue prejudice to the [defendant] Shareholders.” Id. at 12.
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Landmines In Bankruptcy Appellate Practice, Part III
By Michael L. Cook
When courts have made important exceptions in the past year, they have either added a gloss on the Judicial Code, corrected lawyers’ errors, filled in statutory gaps, or clarified the relevant statutory language.
A Strategic Guide for Lenders to Navigate Anticipated Distressed Loan Fallout
By Jay Steinman and Karina Leiter
The steps outlined in this article offer a strategic guide for lenders, empowering them to navigate the complexities of loan workouts and enforcement actions with resilience and foresight.
Third Circuit: Bankruptcy Code Mandates Appointment of Examiner In Chapter 11 Cases
By Francis J. Lawall and Brenden S. Dahrouge
The Third Circuit recently held in 'In re FTX Trading' that the plain text of Section 1104(c)(2) mandates the appointment of an examiner under the specified conditions set forth. As a result, the FTX decision will carry significant implications for large and medium-sized bankruptcy cases.
By Lawrence J. Kotler and Ryan Spengler
The Central District of California court held that a bankruptcy court’s administration of cannabis-related state court claims against a debtor’s estate is not a violation of the Controlled Substances Act.