(United States Ninth Circuit) – In the bankruptcy proceeding of a distributor of bulk petroleum products, held that a consignor’s unperfected security interest in fuel and monetary proceeds was subordinate to the trustee’s interest. Affirmed the judgment below.
(United States Seventh Circuit) – Rejected a mootness argument in a dispute between an insolvent borrower and the holder of a mortgage note. Overruled In re River West Plaza-Chicago LLC, 664 F.3d 668 (7th Cir. 2011), holding that 11 U.S.C. section 363(m) does not make any dispute moot or prevent a bankruptcy court from deciding what shall be done with the proceeds of a sale or lease.
(United States Second Circuit) – Held that a bankruptcy trustee may attempt to obtain property that Bernard Madoff’s investment firm transferred to foreign entities that subsequently transferred it to other foreign entities. The transferees contended that the Bankruptcy Code’s provisions did not extend extraterritorially in this manner. Disagreeing, the Second Circuit held that neither the presumption against extraterritoriality nor international comity principles barred the trustee from recovering in these consolidated actions. The panel vacated the bankruptcy court judgments and remanded.
(United States Fifth Circuit) – Held that a contract to provide financial services was voidable because the company had failed to register as an investment adviser, as it was required to do under the Investment Advisers Act. Affirmed a ruling on this question in the company’s bankruptcy proceeding.