In Executive Benefits Insurance Agency, petitioner vs. Peter H. Arkison, Chapter 7 Trustee, Case No. 12-1200, 573 U.S. __(2014) the United States Supreme Court ( Court) delivered its opinion as a follow up to its landmark decision in Stern v. Marshall. In Stern v. Marshall, the Court held that even though bankruptcy courts are statutorily authorized to enter final judgments on a class of bankruptcy related claims, Article III of the Constitution prohibits bankruptcy courts from finally adjudicating certain of those claims. Under Stern’s reasoning, the Constitution does not permit a bankruptcy court to enter final judgment on a bankruptcy related claim, the relevant statute does permit a bankruptcy court to issue proposed findings of fact and conclusions of law to be reviewed de novo by a federal district court. Because the District Court conducted the de novo review that petitioner demanded, the Court affirmed the judgment of the Court of Appeals upholding the District Court’s decision. The following information has been extracted from the syllabus prepared by the Reporter of Decisions and does not represent the actual written decision by the Court.
In AMR Corporation, et al., Debtors, Case No. 12-3967, 2013 WL 1339123 (S.D.N.Y. April 3, 2013), the United States District Court for the Southern District of New York acknowledged that to be granted relief from the automatic stay under 11 U.S.C. § 362(d), a secured creditor has the initial burden to show that there has been a decline—or at least a risk of decline—in the value of its collateral.
Only then will the burden shift to the debtor to prove that the value of the collateral is not, in fact, declining. On the other hand, for purposes of adequate protection under 11 U.S.C. § 363(e), the secured creditor need only establish the validity, priority or extent of its interest in the collateral. At that point, the debtor bears the burden of proof under § 363(e). The distinction between the respective burdens of proof in §§ 362(d) and 363(e) can be a significant consideration for the formulation of a secured creditor’s strategy at the outset of a chapter 11 case.
The United States Bankruptcy Appellate Panel of the 6th Circuit affirmed the Bankruptcy Court dismissal of five single – asset real estate Debtors’ Jointly Administered Chapter 11 cases under the “For Cause” dismissal provisions of the United States Bankruptcy Code, 11 U.S.C.A. § 1112 (b). see In re Creekside Senior Apartments, LP, et al., 2013 WL 1188061 (6th Cir. BAP Ky.)
The Debtors appealed from the bankruptcy court determination which dismissed five single asset real estate cases. Each Debtor owned a parcel of real property on which it operated a low-income housing apartment complex. In order to demonstrate that cause exists to dismiss a case the moving party must demonstrate that there is both a (1) substantial or continuing loss or diminution of estate assets and (2) an absence of a reasonable likelihood of rehabilitation.
Adjustments to certain dollar amounts in the Bankruptcy Code may affect your decision and strategy to either file a bankruptcy or in defending certain actions filed against you or your company. The automatic adjustments to the dollar amounts in various provisions of the Bankruptcy Code, 11 U.S.C. 101 et seq. went into effect on April 1, 2013. You may access the official forms by clicking the following link to the United States Courts: