NCJ Number
132673
Journal
Secured Lender Volume: 46 Issue: 1 Dated: (January-February 1990) Pages: 40,42,44,46,48-50,52-54,56-58,60,62-63
Date Published
1990
Length
16 pages
Annotation
This annual review of legislative and judicial developments covers items of particular interest to the asset-based financial services industry.
Abstract
Subjects covered include fraudulent bankruptcy transfers, trustee's power to assert claims, adequate creditor protection, payment of administrative expenses in reorganization and liquidation cases, and interest and expenses on secured claims. Other topics covered are environmental enforcement actions and claims, lender liability, abandonment, priority of environmental claims, marshalling, equitable subordination, post-petition effect of security interests in proceeds, limitations imposed by the Fair Labor Standards Act, successor liability, and substantive consolidation. Highlights in the developments include the first decision by a Federal court of appeals that a bankruptcy trustee can recover as a preference those payments received by a lender within 1 year prior to a borrower's bankruptcy if the loan was guaranteed by an insider of the borrower. There were several fraudulent conveyance cases arising out of leveraged buyouts and several cases that considered the liability of a lender under alleged oral agreements to extend credit. The claim of a secured lender who refused to lend sufficient funds to enable its borrower to pay suppliers, in addition to financing minimum operating expenses, was equitably subordinated. Louisiana adopted Article 9 of the Uniform Commercial Code, effective January 1, 1990.