USLegal Reporter » Bankruptcy

U.S. Supreme Court Okays Chyrsler Sale

Dana Altman — Tue, 16 Jun 2009 16:29:48 +0000

Vacating a temporary stay that was ordered, the U.S. Supreme Court has cleared the way for the sale of Chrysler’s prime assets to Italian automaker Fiat. The sale had been challenged by consumer, pension fund, and construction fund groups. The pension and construction fund groups claimed that the use of (Troubled Asset Relief Program) TARP funds to finance the bankruptcy was unconstitutional. The consumer groups challenged the sale on the basis that it would impair the right of consumers to pursue product liability claims.

The Bankruptcy Court for the Southern District of New York has also allowed Chrysler to sever contracts with 789 dealerships. This will mean that those dealerships will no longer be able to promote themselves as being a Chrysler authorized dealer for purposes of providing repair services.

Source: http://jurist.law.pitt.edu/paperchase/2009_06_10_indexarch.php#3922430819694760783

Major Cookie Chain Set to File Bankruptcy

carrie — Mon, 18 Aug 2008 20:42:19 +0000

Mrs. Fields says it will file for Chapter 11 bankrputcy protection. The company has more than 1,200 franchises across the country and is best known for its cookies. The chain also includes TCBY frozen yogurt.

Mrs. Fields’s Co-Chief Executive Michael R. Ward has confirmed the company will file a prepackaged bankruptcy reorganization plan with the U.S. Bankruptcy Court in Wilmington, Del.

The company posted a net loss of $10.7 million last quarter.

Source: http://online.wsj.com/article/SB121883327656645413.html?mod=googlenews_wsj

Recovery of Attorneys’ Fees Allowed in Federal Bankruptcy Case

Della Sellers — Wed, 21 Mar 2007 16:51:08 +0000

The U.S. Supreme Court ruled on Tuesday that a party can recover attorneys’ fees in a federal bankruptcy case as federal bankruptcy law does not prohibit contract-based claims for attorneys’ fees solely because those fees were incurred litigating bankruptcy law issues.

The dispute between Travelers Casualty & Surety Co. of America (Travelers) and Pacific Gas & Electric Co. (PG&E) involved Travelers’ issuing a 100 million dollar surety bond to guarantee PG&E’s payment of workers’ compensation benefits to its injured employees. When PG&E filed for bankruptcy to reorganize its debts, Travelers sought to protect itself from any default by asserting a bankruptcy claim that the reorganization plan did not adequately address workers’ compensation claims. PG&E agreed to include language to protect Travelers in its plan and disclosure statement. Additional litigation between the parties resulted in a stipulation that Travelers could assert a general unsecured claim for attorneys’ fees.

PG&E, however, objected to and the 9th Circuit U.S. Court of Appeals refused Travelers’ claim for such attorneys’ fees on the basis that where the litigated issues do not involve basic contract enforcement questions but are peculiar to federal bankruptcy law, attorneys’ fees will not be awarded. The U.S. Supreme Court found that the previous ruling was not supported by the Bankruptcy Code.

The case is Travelers v. PG&E, 05-1429. Decided March 20, 2007.

See http://www.supremecourtus.gov/opinions/06pdf/05-1429.pdf