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October 14-15, 2020
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ACIC Private Notes August 2020
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Welcome to the August 2020 edition of the ACIC Private Notes!
In this edition, you'll find:
- A save-the-date for the first ever virtual Fall Annual Meeting and Education Conference;
- Recent case law summaries from the Mid-Atlantic Region, prepared by Margaret G. Parker-Yavuz; and
- Recent case law summaries from the Midwest Region, prepared by Michael Robson (Greenberg Traurig).
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Save the Date for Fall Annual Meeting and Educational Conference
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This year's Fall Annual Meeting and Education Conference will take place virtually on Wednesday, October 14 and Thursday, October 15.
Please save the date! More details and registration information will be coming soon!
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Recent Case Law Summaries
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Mid-Atlantic Region
In Kirschner v. J.P. Morgan Chase Bank, N.A., et al.,
the U.S. District Court for the Southern District of New York, applying the so-called "family resemblance" test from Reves v. Ernst & Young, found that notes issued to institutional investors in a syndicated term loan financing do not constitute "securities". The finding in Kirschner underscores the importance of the way in which debt financings are documented and whether the transaction documents describe an instrument as a loan or a security. Click here to learn more.
In Ritzen Group, Inc. v. Jackson Masonry, LLC, the Supreme Court affirmed Sixth Circuit and lower court decisions holding that a bankruptcy court's order denying relief from the automatic stay constitutes a final, immediately appealable order and therefore is subject to the 14-day appeal period under Federal Rule of Bankruptcy Procedure 8002. This decision underlines the need for creditors to assess carefully when to file a motion for relief from the automatic stay and whether the motion is likely to be granted, since an appeal would need to be filed immediately and could potentially preclude the creditor from filing a similar motion at a later point in the case. Click here to learn more.
In Trzaska v. L'Oreal USA, Inc. & L'Oréal, S.A., the U.S. District Court for New Jersey affirmed a magistrate judge's letter order denying an application to compel production of emails, finding that the emails were protected by attorney-client privilege. The court's ruling provides assurance that attorney-client privilege can apply where in-house counsel represents multiple legal entities within a corporate group. Click here to learn more.
Midwest Region
In In re Happy Jack's Petroleum, Inc., a case of first impression before the U.S. Bankruptcy Court, District of Nebraska, the court analyzed whether the conversion of a bankruptcy case from a Chapter 11 bankruptcy to a Chapter 7 bankruptcy had any impact on the treatment of a "super priority" claim. The court found that the conversion does not impact the priority of a Chapter 11 super priority claim, but that the creditor's claim lacked standing nevertheless. Click here
to learn more.
In U.S. v. Banyan, et al., the U.S. Circuit Court of Appeals, Sixth Circuit, reversed the conviction of two parties for bank fraud, arguing that the U.S. federal government had failed to prove the defendants had intended to defraud the federally insured financial institutions rather than their wholly-owned subsidiaries. The court reasoned that the institutions for which the U.S. government's claims were brought under did not meet the requirements to be defined as "financial institutions" under that statute, amongst other deficient claims made by the U.S. government. Click here to learn more.
In Tissue Technology, LLC v. Tak Investments, LLC, an investment dispute arising under an agreement to build $315 million worth of tissue mills, the U.S. Court of Appeals, Seventh Circuit, upheld a lower court decision that withheld all remedies that would transfer notes from secured lenders to parties who breached contractual obligations. The court similarly affirmed the lower court's decision to withhold any remedy to an entity attempting to cancel notes and take control of a business partner without fulfilling its obligations within the contract. Click here to learn more.
In Stoebner v. Opportunity Finance, LLC, et al., a proceeding under Chapter 7 of the U.S. Bankruptcy Code, the U.S. Court of Appeals, Eighth Circuit, affirmed the grant of the defendants' motion to dismiss a trustee's complaint under §544(b) of the U.S. Bankruptcy Code and the Minnesota Uniform Fraudulent Transfer Act, holding per recent Supreme Court of Minnesota precedent that the trustee could not rely on a "Ponzi scheme presumption". Click here to learn more.
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