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§ 510

In re Lehman Bros. Holdings

Ruling
Mortgage-backed securities were not "securities of the debtor or an affiliate" and related claim was not subject to subordination.
Issue(s)
Were claims based on mortgage backed securities claims concerning a security "of the debtor or of an affiliate of the debtor," which should be disallowed?

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Commercial opinion summary, case decided on July 28, 2014 , LexisNexis #0814-086

In re Optim Energy LLC

Ruling
Creditor not entitled to derivative standing to pursue claims against subsidiary that held 100 percent of equity interests of chapter 11 debtors.
Issue(s)
Whether creditor of chapter 11 debtors could be granted derivative standing to pursue claims against an entity that, through its subsidiary, indirectly held 100% of the equity interests of each of the debtors, as well as claims against the subsidiary.

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Commercial opinion summary, case decided on May 13, 2014 , LexisNexis #0614-011

Redmond v. Cimarron Energy Co. LLC (In re Alternate Fuels Inc.)

Ruling
Decisions for recharacterization of creditor's claim and equitable subordination affirmed.
Issue(s)
Did bankruptcy court err in finding that creditors did not sustain their burden of proof as to the validity and amount of their claims, and that any secured claims they had should be equitably subordinated?

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Court :
Judge or Jurisdiction information not available
Commercial opinion summary, case decided on March 18, 2014 , LexisNexis #0414-012

In re Lehman Bros.

Ruling
Claim by prime brokerage customer of debtor subordinated to claim of general unsecured creditors as arising from purchase or sale of securities.
Issue(s)
Should claim of a prime brokerage customer of Lehman Brothers for breach of contract damages due to failure to execute an order for the sale of Lehman Brothers Holding bonds placed days before the Lehman collapse be subordinated to claims of general unsecured creditors.

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Commercial opinion summary, case decided on January 27, 2014 , LexisNexis #0214-083

Pilot v. Alesco Preferred Funding XV Ltd. (In re First Baldwin Bancshares Inc.)

Ruling
Subordination agreement in favor of special purpose entity allowed.
Issue(s)
Was subordination agreement contained in note enforceable in favor of special purpose entity.

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Commercial opinion summary, case decided on September 30, 2013 , LexisNexis #1013-081

LVW Invs. LLC v. Beaufort the Wye LLC (In re UHF Dev. Inc.)

Ruling
Purchaser of lot not entitled to equitable subordination of claim by creditor not obtained by fraud.
Issue(s)
Whether a claimant was entitled to summary judgment on a complaint filed by a purchaser of a lot from the chapter 11 debtor seeking equitable subordination of the claim of the claimant to the claims of all other creditors in the debtor's bankruptcy case pursuant to 11 U.S.C.S. § 510(c).

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Commercial opinion summary, case decided on August 30, 2013 , LexisNexis #0913-114

Gernsbacher v. Campbell (In re Equipment Equity Holdings Inc.)

Ruling
Notes issued by debtor formed to operate seller's business were not subject to equitable subordination in favor of notes issued to seller.
Procedural posture

Plaintiff sellers of businesses to a bankruptcy debtor brought an adversary proceeding against defendant holders of new notes issued by the debtor, seeking a determination that the sellers' notes issued by the debtor had priority over the holders' notes based on equitable subordination of the holders' notes to the sellers' notes or recharacterization of the holders' notes as equity rather than debt.

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Commercial opinion summary, case decided on April 12, 2013 , LexisNexis #0513-010

OChesky v. Templeton (In re American Hous. Found.)

Ruling
Transfers to debtor by lawyer were not loans but preferential, avoidable equity investments.
Procedural posture

Trustee filed an adversary complaint against lawyer to avoid $4.746 million in claims asserted by defendant on account of transfer to or for the benefit of debtor that defendant claimed to have been loans that had been guaranteed by debtor. Plaintiff therein asserted, inter alia, that all such guaranties were fraudulent and that any allowed claims were properly subordinated per 11 U.S.C.S. § 510.

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Commercial opinion summary, case decided on March 30, 2013 , LexisNexis #0513-043

Gernsbacher v. Campbell (In re Equipment Equity Holdings Inc.)

Ruling
Motion by creditor group to have claims of second creditor group subordinated or recharacterized as equity denied.
Procedural posture

This adversary proceeding involved a dispute within a chapter 7 bankruptcy case between two different, sophisticated creditor groups wherein one creditor group (plaintiffs) sought to have the claims of the other creditor group (defendants) either equitably subordinated to the plaintiffs' claims under 11 U.S.C.S. § 510(b) or (c), or recharacterized as equity.

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Commercial opinion summary, case decided on March 29, 2013 , LexisNexis #0613-014

ODonnell v. Tristar Esperanza Props. LLC (In re Tristar Esperanza Props. LLC)

Ruling
Bankruptcy court properly held that mandatory subordination applied to claim of former equity holder.
Procedural posture

Appellant sought review of a decision from the United States Bankruptcy Court for the Central District of California, which concluded that 11 U.S.C.S. § 510(b) mandatory subordination applied to appellant's claim.

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Court :
Judge or Jurisdiction information not available
Commercial opinion summary, case decided on March 08, 2013 , LexisNexis #0613-046