In re: Lehman Bros.

(United States Second Circuit) – In a Chapter 11 bankruptcy appeal by thousands of former employees of debtor who held restricted stock units that were rendered worthless after the filing, the district court’s judgment sustaining debtor’s objections to the claims, on grounds that the claims must be subordinated to the claims of general creditors pursuant to 11 U.S.C. section 510(b) because the former arise from the purchase or sale of securities, is affirmed where the claims at issue must be subordinated pursuant to 11 U.S.C. section 510(b) because, within the meaning of that statute: 1) restricted stock units are securities; 2) the claimants acquired them in a purchase; and 3) the claims for damages arise from that purchase or the asserted rescission thereof.

In re: The Trustees of Conneaut Lake PArk, Inc.

(United States Third Circuit) – In a bankruptcy case involving 40 Pa. Stat. section 638, which prohibits insurance companies from paying fire insurance proceeds to a ‘named insured’ unless the local municipality certifies that no delinquent taxes are owed on the property where the insured structure was located, the District Court’s judgment reversing the Bankruptcy Court grant of summary judgment to the Taxing Authorities and holding that ‘named insured’ as used in Section 638 includes only those who own the structure at issue and are responsible for the delinquent taxes, is reversed where this interpretation contravenes the text of the statute.

Privitera v. Curran

(United States First Circuit) – In a Chapter 7 liquidation proceeding involving a creditor-plaintiff’s attempt to avail herself of two exemptions from debt discharge, the bankruptcy court’s denial of plaintiff’s motion for leave to amend the complaint is affirmed where an adequate basis existed for the bankruptcy court’s denial of the plaintiff’s motion to amend: the new claim, like the old claim, would have been futile.

Porter v. Nabors Drilling USA, L.P.

(United States Ninth Circuit) – In a lawsuit asserting a claim under California’s Private Attorney General Act of 2004 (PAGA), the court grants defendant’s motion to recognize an automatic stay, triggered by its filing for reorganization under Chapter 11 of the Bankruptcy Code, where the exception to an automatic stay established in 11 U.S.C section 362(b)(4), described as the governmental regulatory or governmental unit exception, did not apply to a claim brought by a private party under PAGA.

In re Tronox Inc.

(United States Second Circuit) – In an appeal of a district court order enforcing a permanent anti‐suit injunction issued after a bankruptcy settlement, involving the toxic tort claims of than 4,300 individuals who allege significant injuries from the operation of a wood‐treatment plant in Avoca, Pennsylvania between 1956 and 1996, the appeal is dismissed for lack of jurisdiction where the claims are barred by the injunction because they are generalized ‘derivative’ claims that fall within the property of the bankruptcy estate.

Mastan v. Salamon

(United States Ninth Circuit) – In a Chapter 11 case, the Bankruptcy Appellate Panel’s decision affirming the bankruptcy court’s order disallowing a claim is affirmed where under 11 U.S.C. section 1111(b), those who hold non-recourse liens on real property are granted recourse against the bankruptcy estate upon the filing of the bankruptcy petition.