In re Zero Energy Systems LLC, 2020 WL 6226100, 69 BCD 123 (Bankr. S.D. Iowa 2020). In a dispute during a bankruptcy proceeding involving Zero Energy Inc., one of its creditors, Conlon Construction Company (“Conlon”), sought administrative expense status (priority status) in the payment of its claim from the bankruptcy estate. The Court ruled in favor […]
MidWest Region Update: Midwest Regional Bank v. Caribou Energy Corp., No. 18–cv–1217, 2020 WL 4535228 (E.D. Mo. Aug. 6, 2020).
Midwest Regional Bank v. Caribou Energy Corp., No. 18–cv–1217, 2020 WL 4535228 (E.D. Mo. Aug. 6, 2020). In a matter involving claims by out–of–state loan guarantors that the Missouri District Court lacked personal jurisdiction and that the lender failed to mitigate its damages, the U.S. District Court for the Eastern District of Missouri (“Court”) granted the […]
MidWest Region Update: Uncle Tom’s, Inc. v. Lynn Plaza, LLC, 2021 Ill. App. Ct. (1st) 200205 (May 21, 2021).
Uncle Tom’s, Inc. v. Lynn Plaza, LLC, 2021 Ill. App. Ct. (1st) 200205 (May 21, 2021). In an appeal from an Illinois circuit court’s grant of summary judgment grounded on the theory that a tenant is estopped from challenging disputed charges arising under a lease when the tenant signed an estoppel certificate, the Illinois Court of […]
Mid-Atlantic Region Update: In re Live Primary, LLC, 626 B.R. 171 (2021), United States Bankruptcy Court, S.D. New York
In re Live Primary, LLC, 626 B.R. 171 (2021), United States Bankruptcy Court, S.D. New York Overview: The Bankruptcy Court for the Southern District of New York recharacterized a $6 million debt claim arising from purported loans to a debtor as an equity interest. Although recharacterization of purported debt as equity is an […]
Mid-Atlantic Region Update: In re Consolidated Bedding, Inc., 2021 Bankr. LEXIS 1720 (2021), United States Bankruptcy Court, D. Delaware
In re Consolidated Bedding, Inc., 2021 Bankr. LEXIS 1720 (2021), United States Bankruptcy Court, D. Delaware Overview: The Bankruptcy Court for the District of Delaware denied a junior secured creditor’s claim for proceeds from lawsuits a chapter 7 trustee pursued as part of an agreement with a senior secured creditor. The Court found that the […]
Mid-Atlantic Region Update: In re Orexigen Therapeutics, Inc., 990 F.3d 748 (2021), United States Court of Appeals for the Third Circuit
Mid Atlantic: In re Orexigen Therapeutics, Inc., 990 F.3d 748 (2021), United States Court of Appeals for the Third Circuit Overview: In a matter of first impression, the United States Court of Appeals for the Third Circuit held that triangular setoffs are not permissible in a bankruptcy proceeding due to section 553 of the […]
President’s Message September 2021
President’s Message “Happiness can be found even in the darkest of times, when one only remembers to turn on the light.” Albus Dumbledore (J.K. Rowling). Happy September!! Happy Back to School!! Happy Fall!! Happy Return of Pumpkin Spice Lattes!! Happy NFL Season!! Happy Everything!! Why in the world am I so happy and why am […]
ACIC Private Notes Summer 2021 Edition: 2021 Spring Virtual Investment Forum Recap
ACIC Private Notes Summer 2021 Edition: 2021 Spring Virtual Investment Forum Recap By: Aaron Borden (Prudential Financial) What a difference a year makes. This year’s ACIC Spring Investment Forum marked roughly the one year anniversary of the Covid-19 pandemic. A year ago, most of us were confronting a number of firsts — transitioning to a […]
ACIC Private Notes Summer 2021 Edition: SEC Continues Focus on Digital Asset Securities
ACIC Private Notes Summer 2021 Edition: SEC Continues Focus on Digital Asset Securities By: Jason M. Daniel and Peter I. Altman (Akin, Gump, Strauss, Hauer & Feld LLP) The offer, sale and trading of digital assets has been a focus of the Securities and Exchange Commission (SEC) for the past several years. On February 26, […]
New England Region: Bank of Am., N.A. v. Fay
Rhode Island Supreme Court holds that Rhode Island law governed issue of Guarantor’s liability under loan guaranty, and that res judicata (claim preclusion) bound Guarantors to deficiency judgement calculation rendered by Connecticut superior court. Bank of Am., N.A. v. Fay, 242 A.3d 38 (2020) Timothy Fay and David Patrick were the sole principals in Stonestreet […]
New England Region: Germinara v. People’s Comprehensive Mortgage, LLC
Massachusetts Appeals court affirms decision that while loan made by Lender was usurious, the correct remedy was reformation and not rescission. Lender’s recording of deeds in lieu of foreclose and taking foreclosed property were also not unfair or deceptive trade practice as the Borrower was a sophisticated businessperson, represented by counsel and the taking of […]
Southern Region: In re Vanguard Nat. Res., LLC
Plaintiff’s obligation to pay net profit interest on its working interest in oil and gas leases was not extinguished by its Joint Plan of Reorganization, as net profit interest is a covenant that runs with the land in Wyoming and the Joint Plan of Reorganization unambiguously preserved it. In re Vanguard Nat. Res., LLC, No. […]
Southern Region: Palma v South Florida Pulmonary & Critical Care
Departing members of a limited liability company (“SFPCC” or, the “LLC”) are not liable for a pro rata share of a balance due under notes issued by SFPCC of which the members were accommodation parties. Palma v South Florida Pulmonary & Critical Care, LLC, 307 So.3d 860 (Fla. Ct. App. 2020) In 2016, three physician-members […]
Southern Region: Nodus Int’l Bank, Inc. v. Arocha Hernandez
Allegations in complaint were sufficient for transferee-bank to maintain that it had standing to enforce promissory note and corresponding security instrument against the debtor but insufficient to maintain claims for fraud. Nodus Int’l Bank, Inc. v. Arocha Hernandez, No. 20-23112-CIV, 2021 WL 39560 (S.D. Fla. Jan. 5, 2021). On May 2, 2018, an individual (the “Debtor”) […]
Southern Region: Callicott v. Scott
Minority shareholder barred from bringing a direct action because (i) she failed to allege a “special injury separate and distinct” to her and (ii) direct action may harm creditors of the corporation. Callicott v. Scott, 849 S.E.2d 547 (Ga. Ct. App. 2020). Homeowners Mortgage of America, Inc. (“HOMA”) was a mortgage lending company that operated […]
Southern Region: Matter of First River Energy, L.L.C.
A bank’s properly perfected Delaware security interest in a debtor’s assets had priority over oil producers’ Texas statutory liens that did not conform to the UCC and therefore were not contemplated by Delaware law. Matter of First River Energy, L.L.C., No. 19-50646, 2021 WL 358168 (5th Cir. Feb. 3, 2021) First River Energy, LLC (“First […]
ACIC Committee Reports – March 2021
Committee Reports: March 2021 Development Committee The Development Committee is tasked with engaging the membership, assessing and addressing membership needs and interests, and planning some of the interactive events at the April Conferences and October Meetings. In connection with the upcoming Conference, the Development Committee is assisting the Co-chairs in making the virtual conference […]
Project Finance Trends, Challenges, and Opportunities in 2021
By: Paul Belval and Alexander Judd from Day Pitney LLP 2020 Recap As we look ahead to 2021 and the trends, challenges and opportunities for project finance, we can’t help but pause to take a look back at 2020 and the development of renewable resources. Notwithstanding the COVID-19 pandemic, renewable energy continues to be a […]
United Kingdom Updates: Tax 2020 Developments Affecting Financial Restructurings
Tax 2020: Developments Affecting Financial Restructurings By: Tom Bannister, Akin Gump Strauss Hauer & Feld LLP Executive Summary During the course of 2020, the U.K. government has pushed ahead with introducing new measures that are likely to be of material relevance to financial restructurings and corporate reorganizations. There have also been other international developments […]
United Kingdom Update: Corporate Insolvency and Governance Act
By: Tom Bannister, Akin Gump Strauss Hauer & Feld LLP The Corporate Insolvency and Governance Act (the “Act”) received Royal Assent on 25 June 2020 and is now in force. The Act represents the most extensive changes in the insolvency landscape since the Enterprise Act came into force in 2003. The provisions of the Act […]
Canadian Update: The Supreme Court of Canada Affirms the Common Law Anti-Deprivation Rule
By Danielle Maksimow and Hansik Ha, Norton Rose Fulbright Canada LLP Introduction On October 2, 2020, the Supreme Court of Canada (the “SCC”) confirmed the existence of the common law anti-deprivation rule in Canada with its majority decision in Chandos Construction Ltd. v Deloitte Restructuring Inc., 2020 SCC 25. The anti-deprivation rule operates to invalidate […]
President’s Message – January 2021
Happy New Year!!! One of my favorite quotes is by the 80’s philosopher Ferris Bueller. “Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.” 2020 provided us with a lot of things – COVID, work from home, remote learning, isolation, masks, zoom meetings, virtual happy […]
Key Inter-creditor Concepts in Renewable Energy Transactions
Key Inter-creditor Concepts in Renewable Energy Transactions (By David Markey and Jeff Atkin from Foley & Lardner LLP) Overview The capital used to construct, operate and maintain renewable energy projects in the United States is by now fairly well established. Of course, there are variations depending on the deal, but typically three sources of capital […]
2020 Fall Virtual Annual Meeting and Educational Conference Summary
Summary –ACIC 2020 Virtual Fall Annual Meeting and Education Conference By: Aaron Borden (Prudential Financial) This past year has been both unprecedented and challenging, to say the least. In a single year, we have experienced a pandemic, struggled through an extraordinary strain on the economy, and confronted aspects of racial injustice. Most of us […]
New England Region: Huntington Technology Finance., Inc. v. Neff
By: Kevin Braun and Greg Norton, Morgan Lewis Guarantors’ waiver of defenses to enforcement under guaranty of a lease was upheld, as Guarantor failed to show that the lease was a security interest (as to which Article 9 of the UCC would apply, and under which defenses such as the requirement of good faith and […]
New England: Finance Authority of Maine v. Grimnes
By: Kevin Braun and Greg Norton, Morgan Lewis The commercially reasonableness requirement of §9-1607(3)(a) of the Maine U.C.C. (§9-607(c)(1) of the U.C.C.) did not apply to Secured Lender’s decision not to pursue collateral and instead sue on the personal guaranty of a guarantor. Finance Authority of Maine v. Grimnes, 2020 WL 2764564 (Supreme Judicial Court […]
New England Region: Goddard v. Loosigian
By: Kevin Braun and Greg Norton, Morgan Lewis Massachusetts Appeals Court affirms decision that principal debtor had no right of contribution against guarantor, holding that parties were not co-guarantors on promissory notes, but relationship was one of principal debtor and guarantor. Goddard v. Loosigian, 97 Mass. App. Ct. 1125, (2020). Thomas Goddard (the “Debtor”) and […]
Southern Region: ING Bank, N.V. v. M/V Charana Naree
By: Jeff Dutson, King & Spalding, LLP U.S. maritime law permits assertion of liens over shipping vessels themselves, even when chartered, for necessaries such as shipping fuel, absent actual notice of no-lien provisions of charter to supplier of necessaries; and reference to terms and conditions of sale, printed on the order form, sufficient to allow […]
Southern Region: The Rainmaker Group Ventures, LLC v. Bellack
By: Jeff Dutson, King & Spalding, LLP Claim of implied covenant of good faith and fair dealing to former shareholder based on ambiguity in LLC Agreement did not apply where the subject at issue was expressly addressed in the agreement. The Rainmaker Group Ventures, LLC v. Bellack, 841 S.E.2d 738 (Ct. App. Ga. 2020). The […]
Southern Region: Wilson v. Gandis
By: Jeff Dutson, King & Spalding LLP A thorough review of company emails reveal a plot by the majority members to squeeze out the minority member. Wilson v. Gandis, 844 S.E. 2d 631 (S.C. Sup. Ct. 2020). David Wilson, a minority member in a 3-member LLC (Carolina Custom Converting, LLC, aka “CCC”) brought an action […]
Southern Region: Wells Fargo Bank, N.A. v. Highland Constr. Mgmt. Servs.
By: Jeff Dutson, King & Spalding LLP Pledge of security interest in a Virginia LLC does not include debtor’s indirect membership interests in such LLC absent explicit language in security agreement. Wells Fargo Bank, N.A. v. Highland Constr. Mgmt. Servs., L.P., 807 F. App’x 246, 248 (4th Cir. 2020) The issue before the Fourth Circuit […]
Southern Region: Synovus Bank v. Kelley
By: Jeff Dutson, King & Spalding LLP Georgia Supreme Court rules that a judgment creditor’s lien on real property is created the day the judgment is recorded, not the day the judgment is issued. Synovus Bank v. Kelley, No. 7:18-cv-00202 (Ga. Sup. Ct. Aug. 24, 2020). On December 7, 2016, Synovus Bank won a judgment […]
Committee Reports: September 2020
By: Mikhel Schecter of Paul, Weiss, Rifkind, Wharton & Garrison, LLP Development Committee The Development Committee is tasked with engaging the membership, assessing and addressing membership needs and interests, and planning some of the interactive events at the April Conferences and October Meetings. In connection with the upcoming October Annual Meeting, the Development Committee will […]
Revisiting Force Majeure Provisions in light of the Coronavirus Outbreak
By: Chiraag Kumar, Senior Counsel at MetLife Investment Management The coronavirus outbreak has impacted the world in myriad ways. The most distressing, of course, is the health effects felt by the millions of people who have been inflicted. The adverse impacts on business have been far less concerning, but substantial. One example: project finance investors […]
Canadian Update: Government Liquidity Program Options for Canadian Debtors
By: Danielle Maksimow and Hansik Ha, Norton Rose Fulbright Canada LLP Many Canadian businesses who are debtors of institutional investors are facing economic pressures and liquidity concerns during the COVID-19 pandemic. In response, the Government of Canada is providing various liquidity support to qualifying Canadian businesses to alleviate this concern. Businesses can qualify for various […]
Spotlight on New Fellows – July 2020
By: Bryan Cho, MetLife Arinze N. Onugha is a senior associate in the New York office of Sullivan & Worcester. He represents institutional investors, including regulated funds of funds, family offices and pension plans, making alternative investments in domestic and offshore special situations, growth, buy-out, venture capital, real estate and other private investment funds and […]
President’s Message July 2020
President’s Message By: Anthony D. Yager, Chapman and Cutler LLP What an unusual year 2020 has been so far! Like me, I assume many of you have been relegated to working from home during quarantine on a makeshift desk, hoping to resume our normal lives soon. Fortunately, the weather has finally been nice enough here […]
ACIC TPMC Committee Model Form Updates
A lot of what the TPMC has been discussing over the last few weeks was addressed in the ACIC CLE presentation on April 16, 2020 entitled,“The Practical Impacts of COVID-19 on Private Placement Transactions”, by Colin Pennycooke (Principal Insurance), Stacey Pike (Chapman and Cutler LLP), Christopher A. Lawrence (Akin Gump Strauss Hauer & Feld LLP), […]
New NAIC Rules for Ground Lease Financing Transactions
The National Association of Insurance Commissioners (the “NAIC”) recently approved new rules with respect to ground lease financing transactions (each a “GLFT”). GLFTs are generally those that have the following characteristics: (i) a long term ground lease (typically 99 years); (ii) one or more subtenants in an existing or to be construction building; (iii) both […]
Southern Region: In re Palm Avenue Partners, LLC
In re Palm Avenue Partners, LLC, No. 8:12-bk-09808-MGW, 2019 WL 6971160 (Bankr. M.D. Fla. December 17, 2019). Tom Leiter solicited $2.5 million in investments to develop property through Palm Avenue Partners, a company he and his son managed. He (through Beacon Homes, which he solely owned) spent $300,000.00 to acquire the contractual rights to buy […]
Southern Region: TMX Finance, LLC v. Goldsmith
TMX Finance, LLC v. Goldsmith, 352 Ga. App. 190 (Ct. Ap. Ga. 2019). Ousted owners of ICOT Holdings, LLC and ICOT Hearing (collectively, “ICOT”) filed a direct action against Young, a guarantor and former co-member of ICOT, in addition to his web of companies, alleging breach of a limited liability company’s operating agreement, breach of […]
Southern Region: SE Prop. Holdings, LLC v. Unified Recovery Grp.
SE Prop. Holdings, LLC v. Unified Recovery Grp., LLC, 410 F. Supp. 3d 775 (E.D. La. 2019). A Louisiana parish contracted with Unified Recovery Group, LLC (“URG”) to remove debris following Hurricane Katrina (the “Katrina Contract”) and Hurricane Isaac (the “Isaac Contract”). Thereafter, URG entered into a security agreement with SE Property Holdings, LLC (“SEPH”), […]
Southern Region: Bethesda Road Partners, LLC v. Strachan
Bethesda Road Partners, LLC v. Strachan, 832 S.E.2d 503 (N.C. Ct. App. 2019). A real estate venture (the “Borrower”) executed a promissory note (the “Note”) to a bank (the “Bank”) as part of a project. The Bank required each of the members of the LLC to execute personal guaranties. The project failed, the Note matured, […]
Southern Region: In re Tara Retail Group, LLC
In re Tara Retail Group, LLC, 607 B.R. 839 (Bankr. Dist. W. Va. 2019) In September 2013, Tara Retail Group, LLC (“Debtor”) purchased a multi-tenant commercial property known as The Crossings Mall. In conjunction with the purchase of this property, the Debtor entered into a Loan Agreement with UBS Real Estate Securities, Inc. The Debtor […]
ACIC Committee Reports
Membership Committee The primary responsibility of the Membership Committee is to consider applications for ACIC membership and to recommend those applicants meeting the membership criteria of the College to the Board of Trustees for a membership vote. In discharging this responsibility, the committee considers the totality of a candidate’s responses in his/her application, with particular […]
New England Region: Auctus Fund, LLC vs Sunstock, Inc.
Auctus Fund, LLC v. Sunstock, Inc., 405 F. Supp. 3d 218 (D. Mass. 2019) Sunstock Inc., (the “Borrower”) issued convertible promissory notes to Auctus Fund, LLC (“Auctus”) and EMA Financial, LLC (“EMA”, and each a “Lender”, and collectively the “Lenders”) in 2017. Both Lenders had a provision in their respective promissory notes where in the […]
New England Region: Metcalf v. Fitzgerald
Metcalf v. Fitzgerald, 333 Conn. 1, 214 A.3d 361 (2019) Jonathan Metcalf (the “Debtor”) filed a chapter 7 bankruptcy petition for his business and later a petition individually. One of his creditors, Ion Bank (the “Creditor”), objected to the discharge of any the Debtor’s obligations in bankruptcy court and initiated an adversary proceeding against the […]
New England Region: In Bank of America, N.A. v. New England Quality Service, Inc.
Bank of America, N.A. v. New England Quality Service, Inc., 790 F. App’x 314 (2d Cir. 2019) In August of 2012, New England Quality Service, Inc. and affiliates (the “Borrowers”) entered into a loan agreement with Bank of America, N.A. (the “Lender”). Over the next few years, the Borrowers expanded their relationship with the Lender, […]
United Kingdom Update: Protecting Tax in Insolvency
Protecting Tax in Insolvency Introduction The current priority of debts in an English insolvency are determined by reference to the Insolvency Act 1986, which provides for preferential status in respect of certain debts including, for example, employee remuneration and occupational pension schemes. This status ensures that these preferred debts are paid after creditors holding fixed […]
My Chi To Appointed as Executive Deputy Superintendent of the Insurance Division at the Department of Financial Services
New York Superintendent of Financial Services Linda A. Lacewell has appointed, current ACIC fellow and former ACIC Trustee, My Chi To, as executive deputy superintendent of the Insurance Division at the Department of Financial Services (DFS), which regulates more than 1,400 insurance companies with assets of $4.7 trillion. Click Here to learn more.
United Kingdom Update: Syncreon – The English Patient
Syncreon: The English Patient On 1 October 2019, the landmark cross-border restructuring of the Syncreon group completed. Pursuant to the restructuring, the Syncreon group’s funded debt was reduced by approximately U.S. $625 million and the Syncreon group was provided with approximately U.S. $250 million of new financing. The restructuring of the Syncreon group is widely […]
Introduction to New ACIC Website
To Our ACIC Fellows and Friends: Please allow us a few moments to introduce you to our newly designed ACIC Website! The members of the website committee, along with our ACIC administrative office, have been hard at work for the past year on the new site, and we are excited for you all to see […]
Canadian Update: Wei vs. Lei BCCA 114
Wei v Li, 2019 BCCA 114 Summary In Canada, s. 347 of the Criminal Code of Canada (the Criminal Code) precludes interest rates in excess of 60% per annum. In Wei v Li., the defendants defaulted in the re-payment of their loans to the plaintiff. The plaintiff obtained a judgment from a Chinese court after […]
