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authority to absolve, or otherwise protect, a debtor from the opinions of him that may arise as a result of his wrongful conduct." Lastly, the court relied on two public policy grounds for including its factual findings: 1) transparency, so that the public can determine that the court's actions were "not arbitrary or motivated by some improper purpose;" and 2) providing a clear record for potential appellate review.
i. RadLAX Gateway Deck, LLC v. Amalgamated Bank (In re River Road Hotel Partners, LLC), 132 S.Ct. 2065 (2012)
Issue: Whether Subsection (iii) of § 1129(b)(2)(A) can be used to confirm a plan that seeks to sell encumbered assets free and clear without providing the right to credit bid, or whether subsection (iii) can only be used to confirm plans that propose disposing of assets in ways that can be distinguished from those covered by Subsections (i) and (ii).
Holding: The debtor sought to confirm a cramdown bankruptcy plan over lender's objection. They proposed to sell all of the debtor's property at an auction and use the sale proceeds to repay the bank. Under the auction procedures, the bank would not be permitted to credit bid at the auction. Debtor asserted that such treatment was fair and equitable pursuant to § 1129(b)(2)(A) (iii) because the lender would receive the "indubitable equivalent" of it secured claim upon the payment of all the sale proceeds. The Court held that the debtor's may not use "indubitable equivalent" provisions under § 1129(b)(2)(A)(iii) which is effectively a general provision that was being used to override a specific provision under § 1129(b)(2)(A)(ii) that does provide the creditor the right to credit bid at a sale. Accordingly, the lower court's denial of confirmation of the plan was affirmed.
ii. Sunbeam Products, Inc. v Chicago American Manufacturing, LLC, 686 F.3d 372 (7th Cir. 2012)
Issue and Holding: A trustee's rejection of intellectual property license allows licensees to continue using the property after rejection, provided they meet certain conditions. While § 365 (n) provides that in certain circumstances licensees can continue to use "intellectual property" after rejection, "intellectual property" does not include trademarks under § 101(35A).
iii. In re Lyondell Chemical Co., 505 B.R. 409 (S.D.N.Y. 2014).
Issue: Whether Hedge fund could bring adversary proceeding against investment banker in jointly administered Chapter 11 cases, alleging tortious interference with contract and tortious interference with prospective economic relations based on banker's alleged wrongful conduct, acting as debtor's agent, in denying hedge fund opportunity to participate as lender in debtor's exit financing.
©2014 William L. Norton III
