Client Alerts & Publications

It is common for buyers of assets in bankruptcy cases to proceed to closing even if the court’s approval of the sale is under appeal. Their willingness to do so comes in large measure thanks to Section 363(m) of the Bankruptcy Code, which protects most sales from being unwound even in the face of an otherwise meritorious appeal. 

A recent court decision has provided guidance regarding the meaning of “governmental unit” under the U.S. Bankruptcy Code.This determination is important because if it is a “governmental unit,” an entity would only be eligible to file a bankruptcy petition if it is a “municipality” under the Bankruptcy Code and meets the other eligibility requirements for filing a municipal bankruptcy petition.

A recent decision of the United States District Court for the District of Delaware has provided further support within the Third Circuit for so-called “gift” plans (i.e., plans in which a secured creditor class “gifts” a portion of its plan distribution to a junior class).

The Internal Revenue Service recently provided excise tax relief for funds taxed as regulated investment companies that were required to increase their gross income because of the new Section 965 transition tax.

Earlier this month, Governor Jerry Brown of California signed into law a bill that sets some of the strongest clean energy standards in the world. Senate Bill 100 requires that one hundred percent of all retail sales of electricity in California come from clean energy sources by 2045.

The Jefferson County bankruptcy proceeding may have reached its culmination with a recent decision by the U.S. Court of Appeals for the Eleventh Circuit finding an appeal of the bankruptcy court’s approval of the Jefferson County plan of adjustment as equitably moot.

On August 22, the three federal banking agencies issued an interim final rule implementing the May 2018 banking law’s requirement that investment grade, liquid and readily marketable municipal obligations be treated as Level 2B “high quality liquid assets” under the liquidity coverage ratio rule.

The U.S. Court of Appeals for the Fifth Circuit recently affirmed decisions of a Bankruptcy Court and District Court recharacterizing an alleged lease to a disguised financing arrangement. The Court determined that the transaction was “per se” a financing, and therefore did not need to go on to analyze the economic realities of the transaction in detail.

As an increasing number of jurisdictions have entered into intergovernmental agreements related to FATCA or agreed to mandate compliance with the OECD common reporting standard, exempt organizations are being asked to classify themselves in subscription agreements and forms provided to the investment vehicles.

A decision by the Court overseeing Puerto Rico’s bankruptcy-like Title III proceeding has reiterated what every secured creditor understands — perfection matters. The Court found that bondholders holding $2.9 billion in debt issued by the Employees Retirement System of the Government of the Commonwealth of Puerto Rico were rendered unsecured due to inadequate financing statements.

On August 20, the SEC issued Release No. 34-83885 adopting amendments to Rule 15c2-12 under the Securities Exchange Act of 1934, as amended. The amendments add two new events to the list of reportable events for which an issuer or obligated person must provide notice to the MSRB's Electronic Municipal Market Access website.