  |
  |
  |
    
  
   |
 | |||
|
|
|
|
| |||
the state court appeal and the impact of such potential success on the feasibility of the plan. (2) On the issue of post-petition financing, the Ninth Circuit affirmed the bankruptcy court's order approving, nunc pro tunc, the debtor's refinancing of his house. The debtor did not obtain approval from the court prior to this transaction, but § 364(c)(2) does not require the bankruptcy court to authorize a financing transaction before the debt is incurred. The bankruptcy court should consider four factors in determining whether to exercise its equitable discretion to grant nunc pro tunc approval of post-petition financing under § 364(c)(2): whether the financing transaction benefits the bankruptcy estate, whether the creditor adequately explained its failure to seek prior authorization or otherwise acted in good faith, whether there is full compliance with the requirements of § 364(c)(2) and whether the circumstances of the case present one of those rare situations in which retrospective authorization is appropriate.)
In re Dow Corning Corp., 456 F.3d 668 (6th Cir. July 26, 2006) (Unsecured creditors may recover post-petition interest at the default rate contained in their contracts with a solvent debtor and may recover attorney's fees and expenses if provided for in their contracts. The debtor's plan was not fair and equitable under § 1129(b)(1) because it violated the absolute priority rule by allowing shareholders to retain millions of dollars while denying unsecured creditors contractual interest at the default rate. Absent compelling equitable considerations, when a debtor is solvent, the bankruptcy court must enforce the creditors' contractual rights, and the bankruptcy court abused its discretion by limiting unsecured creditors' recovery of interest to the non-default rate and denying recovery of attorney's fees and expenses.)
In re Eagle-Picher Industries, Inc., 447 F.3d 461 (6th Cir. May 05, 2006) (Postpetition patent infringement and contract claims against debtor were not discharged by confirmation of plan of reorganization, as they arose from debtor's ordinary course of business, and the terms of the confirmed plan provided that "liabilities incurred in the course of business" would be paid by the reorganized debtor.)
International Paper Co. v. MCI WorldCom Network Services, Inc., 442 F.3d 633 (5th Cir. Mar. 6, 2006) (The Eighth Circuit dismissed the appeal of a prepetition District Court summary judgment ruling in favor of debtor/defendant, where debtor/defendant's alleged trespass for its use of underground cables was not a continuing trespass under state law and thus arose pre-confirmation. Such pre-confirmation claims were discharged in the order confirming the plan of reorganization pursuant to § 1141(d)(1)(A).)
