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U.S. Bankruptcy Court Agrees to Enforce English Three-Step, with Third-Party Releases, Used by Mexican Auto Financer

Manipulation of “center of main interest” to secure UK bankruptcy venue does not bar chapter 15 recognition so long as creditors are not disadvantaged. On February 24, 2025, U.S. Bankruptcy Judge Michael E. Wiles granted...more

Bankruptcy Court Rejects Attempts to Lock Up Creditor Votes in Favor of Reorganization Plan

Recent decisions reflect a renewed focus on lock-up provisions by bankruptcy courts. The U.S. Bankruptcy Court for the Southern District of New York recently severed a provision from a post-petition agreement that required...more

Recent Ruling Addresses Applicability of Alternative A and Cape Town Convention in U.S. Bankruptcy Cases

In the absence of a formal declaration or notification to UNIDROIT, Alternative A (as adopted domestically by Sweden) is deemed to have no international effect and no applicability in U.S. bankruptcy case. Although Sweden...more

Conflicting Court Rulings on Subchapter V Eligibility Leave Small Businesses in Limbo

Two recent bankruptcy court decisions reflect a split of authority on subchapter V eligibility. In re Macedon Consulting Inc. finds that all future amounts due under an unexpired lease qualify as “noncontingent and...more

When Does an Alter Ego Suit Alleging Debtor and Non-Debtor Are “One and the Same” Violate the Discharge Injunction?

The Ninth Circuit Bankruptcy Appellate Panel holds that a discharge injunction does not bar an alter ego claim against a non-debtor where, under applicable law, the result of an alter ego finding is not to deem the entities...more

Contiguous Condominiums Are Not “SARE”

Lacking a common scheme or plan, two adjacent commercial condominium units owned by the same debtor and subject to the same mortgage and deed, but having different tenants, commercial uses, plans for commercial development...more

No Cutting the (Priority) Line!: Incidental Beneficiaries to Assumed Contracts and Leases Cannot Assert Cure Claims Against...

In rejecting an incidental beneficiary’s cure claim, the Second Circuit reasoned that affording a non-party administrative priority “would let it cut the line and stand in front of even secured creditors in exchange for...more

Time Approach Applied to Cap Rent Claim in Century 21 Bankruptcy Cases

New York bankruptcy court breaks with precedent and endorses time approach for calculating lease termination damages over rent amount approach, resulting in smaller claims for landlords. Time approach limits, and often...more

The Letter of Credit Conundrum: When a Debtor’s Default May Be Preferable to Its Late Payment

“Can an unsecured creditor be better off when the debtor defaults rather than paying off the debt? Yes: Law can be stranger than fiction in the Preference Zone.”—Ninth Circuit Untimely payment by tenants and other obligors...more

Personal Guaranties May Not Deter Property Owner Bankruptcies

Lenders should plan for real estate owner bankruptcies despite having a non-recourse carveout guaranty triggered by the owner’s bankruptcy filing. Real estate bankruptcies may occur despite personal guaranties because...more

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