On December 31, 2024, the United States Court of Appeals for the Fifth Circuit and the New York Appellate Division, First Department, both issued decisions evaluating the validity of so-called “uptier” transactions under New York law. In re Serta Simmons Bedding, LLC, Excluded Lenders, No. 23-20181 (5th Cir. Dec. 31, 2024) (“Serta”); Ocean Trails CLO VII, et al. v. MLN TopCo Ltd., et al., No. 2024-00169 (N.Y. App. Div. 1st Dep’t Dec. 31, 2024) (“Mitel”).

On January 10, 2025, Judge Reed O’Connor of the United States District Court for the Northern District of Texas ruled, following a four-day bench trial, that an airline breached ERISA fiduciary duties when investing employees’ 401(k) plan retirement assets utilizing investment managers and funds with environmental, social, and governance (“ESG”) objectives.  Spence v. American Airlines Inc., et al., No. 23-cv-00552, 2025 WL 225127 (N.D. Tex. Jan. 10, 2025). 

On September 12, 2024, the United States Court of Appeals for the Eighth Circuit reversed a trial court decision that had rejected a bank’s assertion of the in pari delicto defense to aiding and abetting claims brought by the bankruptcy trustee for a debtor that had allegedly perpetrated a Ponzi scheme. Kelley v. BMO Harris Bank Nat’l Ass’n, 2024 WL 4158179 (8th Cir. Sept. 12, 2024). The trustee alleged various claims under Minnesota law against the bank, including a claim for aiding and abetting breach of fiduciary duty, alleging that employees of the bank’s predecessor-in-interest knew about the Ponzi scheme, ignored money‑laundering alerts, and allowed the company to overdraft more money than permitted under bank policy. The trial court held that the in pari delicto defense was unavailable because the company had previously been placed in receivership before filing for bankruptcy; the jury then found the bank liable and awarded more than $550 million in compensatory and punitive damages. The Eighth Circuit reversed, holding that the bankruptcy trustee stood in the shoes of the debtor, including with respect to the in pari delicto defense, even if under Minnesota law the defense could not have been asserted against a receiver while the company was in receivership.

On May 23, 2024, the United States Supreme Court held that if parties’ agreements conflict as to whether a dispute is subject to arbitration, then a court (not an arbitrator) must decide which contract controls. Coinbase, Inc. v. Suski, --- S.Ct. ----, 2024 WL 2333424 (2024).

On June 2, 2020, Judge Donald R. Cassling of the United States Bankruptcy Court for the Northern District of Illinois held that a state executive order suspending dine-in services to address the COVID-19 pandemic (the “Executive Order”) constituted a force majeure event that partially excused performance under the applicable lease agreement.  In re Hitz Restaurant Group, No. 20-B-05012, 2020 WL 2924523 (Bankr. N.D. Ill. June 2, 2020).  The creditor, a property management company, sought to enforce the obligation of the debtor, a restaurant group that leased property from the creditor and filed for bankruptcy, to pay post-petition rent under Section 365(d)(3) of the Bankruptcy Code.  11 U.S.C. §§ 365(d)(3).  Applying contract principles under Illinois law, the Court held that the force majeure clause of the lease agreement excused the debtor’s lease payments, but only to the extent the debtor’s operations were impacted by the Executive Order. 
 

On May 20, 2020, in light of evolving circumstances with respect to the COVID-19 health emergency, the Chief Administrative Judge of the New York State Courts issued a Memorandum lifting some of the restrictions previously put in place concerning court filings and other activities in New York State trial courts.  The most significant change is that certain electronic filings will now be permitted again.
 

On May 22, 2020, Judge Paul G. Gardephe of the United States District Court for the Southern District of New York dismissed a complaint asserting claims under state blue-sky laws as well as common-law claims against financial institutions that acted as arrangers on syndicated Term Loan B notes (“TLBs”), holding that the notes at issue are not “securities.”  See Kirschner v. JPMorgan Chase Bank, N.A., No. 17-cv-6334 (PGG) (May 22, 2020).  This is an important decision in that it is the first case of which we are aware to address whether TLBs are securities.  Plaintiff was granted leave to amend, although the basis for an amendment is not apparent.
 

On April 30, 2020, the Chief Administrative Judge of the New York State Courts issued a Memorandum lifting some of the prior restrictions put in place concerning court filings and other activities in New York State trial courts, in light of evolving circumstances with respect to the COVID-19 health emergency.  The most significant change is that certain electronic filings will now be permitted again.
 

On March 6, 2020, the Alternative Rate Reference Committee (ARRC), the Federal Reserve’s LIBOR-transition working group comprised of private-sector entities and industry regulators, issued a press release of its New York State legislative proposal for amending financial contracts that lack adequate fallback language.  The proposed New York law would apply to certain LIBOR-based financial contracts executed prior to LIBOR’s discontinuation and amend them, by operation of law, to include ARRC’s recommended fallback rate plus a spread adjustment.  ARRC drafted the law to provide legal certainty and to minimize the potentially adverse economic consequences associated with the industry’s transition away from LIBOR.