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Split Ninth Circuit Requires Default Interest to Cure Default
A Chapter 11 debtor “cannot nullify a preexisting obligation in a loan agreement to pay post-default interest solely by proposing a cure,” held a split panel of the U.S. Court of Appeals for the Ninth Circuit on Nov. 4, 2016. In re New Investments Inc., 2016 WL 6543520, *3 (9th Cir. Nov. 4, 2016) (2-1). Reversing the bankruptcy court, the court's majority relied on a 1994 amendment of Bankruptcy Code § 1123(d) (” … the amount necessary to cure [a] default [under a reorganization plan] shall be determined in accordance with the underlying agreement and applicable nonbankruptcy law.”) Id. at *2. In effect, the amended § 1123(d) overruled the Ninth Circuit's earlier holding that “a debtor who cures a default, thus 'nullify[ing] all consequences of' that default, may repay arrearages at the pre-default interest rate.” Id. at *5, quoting In re Entz-White Lumber & Supply, Inc., 850 F.2d 1338, 1342 (9th Cir. 1988). According to the Ninth Circuit, the “plain language of § 1123(d) compels” the result it reached. Id. at *3.
Relevance
Courts have regularly wrestled with lenders' asserted claims to contractual default interest. In the Ninth Circuit, eight months before the Court of Appeals handed down New Investments, a Bankruptcy Appellate Panel (BAP) held that a “bankruptcy court should apply a presumption of allowability for the contracted for default rate, 'provided that the rate is not unenforceable under applicable nonbankruptcy law.'” In re Beltway One Development Group, LLC, 547 B.R. 819, 830 (9th Cir. BAP 2016), quoting 4 Collier, Bankruptcy ¶506.04[2][b][ii], at 506-105 (16th ed. 2015).
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Removing Restrictive Covenants In New York
In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?