In its recent decision in Meruelo Maddux Properties,
Inc.,1 the Court of Appeals for the Ninth Circuit
held that an entity that meets the definition of a "single
real estate" debtor under the Bankruptcy Code may not escape
the consequences of such designation simply because it is a
subsidiary of a group of companies with integrated and intert-wined
relationships among them. The decision may provide powerful rights
not only to lenders to such entities in general, but could
significantly enhance the rights of creditors of real estate owning
single purpose entities.
The MMPI Case
Meruelo Maddux Properties, Inc. ("MMPI") is the parent
company to more than fifty subsidiaries that filed chapter 11
bankruptcy petitions in Los Angeles in March of 2009. MMPI and its
subsidiar-ies own and develop real property in the Los Angeles
area....
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Internal investigations of billing issues usually involve audits. It is important to approach an audit carefully or the auditors can create more risk for the organization by misinterpreting the standards.
In Industrial Enterprises of America v. Burtis (In re Pitt Penn Holding Co., Inc.), 2012 WL 204095 (Bankr. D. Del. Jan. 24, 2012), a Delaware bankruptcy court held that the two-year statutory "look-back" period with respect to which a fraudulent transfer may be avoided pursuant to section 548 of the Bankruptcy Code cannot be "equitably tolled."
As the Public Company Accounting Oversight Board (PCAOB) inspects audits conducted by the registered independent accounting firms it regulates, it continues to see numerous audit failures relating to the accounting for, and disclosure of, related party1 and significant unusual transactions.
Compliance audits of outsourcing service provider arrangements have become increasingly common over the past few years, especially for service scope affecting public companies’ financial reporting.
Troubled offshore funds may have to become more creative in looking to protect their U.S. assets from creditors, if a controversial new bankruptcy court decision is upheld. A U.S. bankruptcy court in New York has declined to recognize the Cayman Islands liquidation proceedings filed by two Bear Stearns hedge funds whose Cayman liquidators had sought to protect against seizure of U.S. assets by filing petitions for protection under Chapter 15 of the Bankruptcy Code.
For decades there have been few, if any, significant opinions that considered a secured creditor’s right to credit bid its claim in an asset sale under a Chapter 11 plan.
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