This post is about a junkyard, hogs getting slaughtered, and a bankruptcy judge poised to sanction a creditor and her counsel. The message from the case to would-be claimants in other cases is simple: do not “overreach.” In...more
It’s often hard to persuade a bankruptcy court to grant a motion for substantial contribution. Any attorney thinking about making a motion should first ask herself two questions. First, has my work benefitted both my client...more
12/29/2022
/ Alter Ego ,
Bankruptcy Court ,
Bankruptcy Trustees ,
Breach of Duty ,
Chapter 11 ,
Commercial Bankruptcy ,
Contribution Claims ,
Creditors ,
Debtors ,
Fraud ,
Section 503
We have previously blogged about Siegel v. Fitzgerald, the Supreme Court decision last June that invalidated the 2018 difference in fees between bankruptcy cases filed in Bankruptcy Administrator judicial districts and U.S....more
12/2/2022
/ Bankruptcy Court ,
Bankruptcy Trustees ,
Certiorari ,
Commercial Bankruptcy ,
Constitutional Challenges ,
Debtors ,
Fees ,
Remedies ,
SCOTUS ,
Siegel v. Fitzgerald ,
Uniformity ,
Vacated
Another domino has fallen. Earlier this year, we wrote about the challenges facing the crypto industry that resulted in the bankruptcy filings of Three Arrows Capital, Celsius Network, and Voyager Digital. We noted that...more
To encourage parties to transact with debtors in bankruptcy, the Bankruptcy Code in corporate bankruptcies provides highest priority to “administrative expenses,” which include “the actual, necessary costs and expenses of...more
A bankruptcy court ruled that a creditor didn’t need to seek derivative standing to sue a liquidating trustee. The creditor, himself a trustee of the debtor’s employee stock-option plan, had standing to sue without prior...more
The doctrine of equitable mootness is in the news again. The Supreme Court recently denied a cert. petition in a case where the petitioner wanted the doctrine ruled unconstitutional. KK-PB Financial LLC v. 160 Royal Palm...more
The Fifth Circuit recently dismissed an appeal of a confirmation order as equitably moot. The decision was based on three key factors: the appellant hadn’t obtained a stay pending appeal, the plan had been substantially...more
“[E]nsnared between his involvement in a business that is legal under the laws of Arizona but illegal under federal law,” one debtor’s chapter 13 petition was recently dismissed due to his undisputed violations of the...more
Another case shows the perils of waiting until the final minutes to meet a court deadline. In re U-Haul, 21-bk-20140, 2021 Bankr LEXIS 3373 (Bankr. S.D. W. Va. Dec. 10, 2021).
The debtor is a well-known truck rental...more
In many chapter 11 cases, creditors’ committees can play a vital role in maximizing the recoveries of unsecured creditors. But the powers of creditors’ committees are circumscribed by both the Bankruptcy Code and case law....more
U.S. Bankruptcy Judge Craig A. Gargotta rejected a debtor’s attempt to use “CARES Act” funds, which it did not actually qualify for, to pay creditors in its chapter 11 case.
BR Healthcare Solutions (the “Debtor”)...more
10/20/2021
/ Bankruptcy Court ,
CARES Act ,
Centers for Medicare & Medicaid Services (CMS) ,
Chapter 11 ,
Commercial Bankruptcy ,
Coronavirus/COVID-19 ,
Creditors ,
Debtors ,
Department of Health and Human Services (HHS) ,
Healthcare ,
Paycheck Protection Program (PPP) ,
Small Business
A recent case before bankruptcy judge Karen B. Owens of the United States Bankruptcy Court for the District of Delaware, In re Dura Auto. Sys., LLC, No. 19-12378 (KBO), 2021 WL 2456944 (Bankr. D. Del. June 16, 2021), provides...more
A recent case shows how even late payments can be used to satisfy the ordinary course of business defense in a preference avoidance action. Baumgart v. Savani Props Ltd. (In re Murphy), Case No. 20-11873, Adv. Pro. No....more
It is well known in the restructuring world that a debtor in bankruptcy can’t get a PPP loan. But what if you’re a debtor and decide a PPP loan could save your business? Will a court dismiss the case so you can seek a loan?...more
3/9/2021
/ Appeals ,
Bankruptcy Code ,
Bankruptcy Court ,
Commercial Bankruptcy ,
Coronavirus/COVID-19 ,
Corporate Counsel ,
Creditors ,
Debtors ,
Motion to Dismiss ,
Paycheck Protection Program (PPP) ,
Relief Measures ,
Small Business
A seat at the table: this is what you likely want when your financial interests are drawn into a bankruptcy court proceeding. You’ll seek to be heard and do what you can to maximize your recovery. This is especially true if...more
Perfect your liens on time or you may lose them. That’s the painful lesson U.S. Bankruptcy Judge Karen B. Owens taught Halliburton Energy Services, Inc. in her recent decision.
Ruling on plaintiff-debtor Southland Royalty...more
Courts reviewing a bankruptcy court’s decision to approve a chapter 11 reorganization plan over the objections of an interested party must consider not only the merits, but also (if implementation of the plan was not stayed)...more
When there are large numbers of substantial individual tort claims against a debtor, potentially involving claimants unknowable to the debtor who themselves may not know they have a claim, the bankruptcy process faces special...more
2/25/2020
/ Asbestos ,
Asbestos Trust Claims ,
Chapter 11 ,
Commercial Bankruptcy ,
Creditors ,
Due Process ,
Federal Rules of Bankruptcy Procedure ,
Fourteenth Amendment ,
Mass Tort Litigation ,
Mergers ,
Proof of Claims ,
Section 363 ,
Subsidiaries
Section 303 of the Bankruptcy Code allows creditors to initiate an involuntary bankruptcy case against a debtor. The petition initiating the case must be filed by creditors holding claims aggregating to at least $10,000, and...more
The Bankruptcy Code gives a trustee powers to avoid certain pre-bankruptcy transfers of the debtor’s property to other entities. For example, a trustee can avoid transfers made with the intent to impair the ability of...more
10/30/2019
/ Affirmative Defenses ,
Bankrtupcy Code Section 550 ,
Bankruptcy Code ,
Bankruptcy Court ,
Burden of Proof ,
Commercial Bankruptcy ,
Creditors ,
Debt Collection ,
Debtors ,
Due Process ,
Fraudulent Transfers ,
Google ,
Trustees
Judge Martin Glenn last week issued a decision in two related chapter 15 cases, In re Foreign Econ. Indus. Bank Ltd. “Vneshprombank” Ltd., No. 16-13534, and In re Larisa Markus, No. 19-10096, 2019 Bankr. LEXIS 3203 (Bankr....more
10/16/2019
/ Bankruptcy Code ,
Bankruptcy Court ,
Chapter 15 ,
Commercial Bankruptcy ,
Cross-Border ,
Federal Rules of Bankruptcy Procedure ,
Federal Rules of Civil Procedure ,
Foreign Jurisdictions ,
Foreign Subsidiaries ,
Jurisdiction ,
Motion to Vacate ,
Public Policy
Section 548 of the Bankruptcy Code enables trustees to avoid certain pre-bankruptcy transfers of “an interest of the debtor in property,” where the transfer was intended to defraud creditors or where the transfer was made...more
9/23/2019
/ Acquisitions ,
Bankruptcy Code ,
Bankruptcy Court ,
Chapter 7 ,
Commercial Bankruptcy ,
Fraudulent Transfers ,
Mergers ,
Motion for Reconsideration ,
Popular ,
Trustees ,
UFTA
We previously discussed Bankruptcy Judge Martin Glenn’s analysis of the Wagoner Rule in the Feltman v. Kossoff & Kossoff LLP (In re TS Empl., Inc.) case. The bankruptcy trustee (the “Trustee”) had asserted a fraud claim...more
Delaware Bankruptcy Judge Brendan Shannon granted mechanic’s lien claimants $1.6 million for making a substantial contribution in a case by “demonstrably and materially facilitating the process of reorganization.” In re M & G...more