One year ago, we wrote that, unlike in 2019, when the large business bankruptcy landscape was generally shaped by economic, market, and leverage factors, the COVID-19 pandemic dominated the narrative in 2020. The pandemic may...more
One year ago, we wrote that, unlike in 2019, when the large business bankruptcy landscape was generally shaped by economic, market, and leverage factors, the COVID-19 pandemic dominated the narrative in 2020....more
1/27/2022
/ Automatic Stay ,
Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Chapter 15 ,
Commercial Bankruptcy ,
Corporate Counsel ,
Creditors ,
Debtors ,
Executory Contracts ,
Foreign Bankruptcies ,
Insolvency ,
Popular
Despite the absence of any explicit directive in the Bankruptcy Code, it is well understood that a debtor must file a chapter 11 petition in good faith. The bankruptcy court can dismiss a bad faith filing "for cause,"...more
New York Bankruptcy Court Rules That Good Faith Is Not The Gatekeeper To Chapter 15 -
Despite the absence of any explicit directive in the Bankruptcy Code, it is well understood that a debtor must file a chapter 11...more
11/10/2021
/ Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Chapter 15 ,
Chapter 7 ,
Commercial Bankruptcy ,
Corporate Restructuring ,
Creditors ,
Debtors ,
Good Faith ,
Insolvency ,
Leveraged Buyout
Whether the pre-Bankruptcy Code "solvent debtor exception" requiring the payment of postpetition interest to dissenting unsecured creditors under a chapter 11 plan survived the enactment of the Bankruptcy Code in 1978 has...more
Courts disagree over whether provisions in a borrower's organizational documents designed to prevent the borrower from filing for bankruptcy are enforceable as a matter of federal public policy or applicable state law. There...more
In In re Bernard L. Madoff Investment Securities LLC, 12 F.4th 171 (2d Cir. 2021), the U.S. Court of Appeals for the Second Circuit revived litigation filed by the trustee administering the assets of defunct investment firm...more
11/10/2021
/ Bankruptcy Code ,
Bankruptcy Court ,
Bernie Madoff ,
Chapter 11 ,
Fraud ,
Fraudulent Transfers ,
Good Faith ,
Investment Funds ,
Investors ,
Ponzi Scheme ,
SIPA
Chapter 15 petitions seeking recognition in the United States of foreign bankruptcy proceedings have increased significantly during the more than 16 years since chapter 15 was enacted in 2005. Among the relief commonly sought...more
11/10/2021
/ Appeals ,
Bankruptcy Code ,
Bankruptcy Court ,
Chapter 15 ,
Commercial Bankruptcy ,
Cross-Border ,
Discovery ,
Foreign Bankruptcies ,
Insolvency ,
Transfer of Assets ,
UNCITRAL
In yet another chapter in the tortured saga of the fallout from the failed 2007 leveraged buyout ("LBO") of media giant The Tribune Co. ("Tribune") in a transaction orchestrated by real-estate mogul Sam Zell, the U.S. Court...more
11/10/2021
/ Bankrtupcy Code Section 550 ,
Bankruptcy Code ,
Bankruptcy Court ,
Breach of Duty ,
Chapter 11 ,
Citigroup ,
Commercial Bankruptcy ,
Common Stock ,
ESOP ,
Fraudulent Transfers ,
Leveraged Buyout ,
Merrill Lynch ,
Section 548 ,
The Tribune Company ,
Unregistered Securities
Despite the absence of any explicit directive in the Bankruptcy Code, it is well understood that a debtor must file a chapter 11 petition in good faith. The bankruptcy court can dismiss a bad faith filing "for cause," which...more
11/10/2021
/ Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Chapter 15 ,
COMI ,
Commercial Bankruptcy ,
Creditors ,
Cross-Border ,
Debtors ,
Foreign Bankruptcies ,
Good Faith ,
Liquidation ,
Reorganizations ,
UNCITRAL
In In re Energy Future Holdings Corp., 990 F.3d 728 (3d Cir. 2021), the U.S. Court of Appeals for the Third Circuit ruled that even though a "stalking horse" bidder failed to obtain necessary regulatory approvals to close an...more
Whether a contract is "executory" such that it can be assumed, rejected, or assigned in bankruptcy is a question infrequently addressed by the circuit courts of appeals. The U.S. Court of Appeals for the Third Circuit...more
9/21/2021
/ 363 Sales ,
Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Commercial Bankruptcy ,
Contract Terms ,
Creditors ,
Debtors ,
Debtors-in-Possession ,
Executory Contracts ,
Film Industry ,
Materiality ,
Profits ,
Section 365 ,
Work Made For Hire Doctrine
Chapter 15 Update: U.S. Bankruptcy Court Refuses To Enforce Order Approving Indonesian Debt Restructuring Plan Due To Third-party Releases -
Cross-border bankruptcy cases filed in the U.S. under chapter 15 of the...more
7/23/2021
/ Article III ,
Bankruptcy Court ,
Chapter 11 ,
Chapter 15 ,
Comity ,
Commercial Bankruptcy ,
Foreign Bankruptcies ,
Restructuring ,
Safe Harbors ,
Setoff Rights ,
Sharia Law ,
Standing ,
Subordination Agreement ,
Third-Party ,
Tolling
In In re Bankr. Est. of Norske Skogindustrier ASA, 2021 WL 1687903 (Bankr. S.D.N.Y. Apr. 29, 2021), the U.S. Bankruptcy Court for the Southern District of New York held that a foreign representative in a case under chapter 15...more
Cross-border bankruptcy cases filed in the U.S. under chapter 15 of the Bankruptcy Code on behalf of foreign businesses doubled during 2020 and are on pace to set another record-breaking year in 2021 (with more than 123...more
Madoff -
In what may be the beginning of the final chapter of more than a decade of litigation involving efforts to recover $41 million of the fictitious profits paid to certain investors in Bernard Madoff's defunct...more
7/22/2021
/ Bankruptcy Code ,
Bankruptcy Court ,
Bernie Madoff ,
Chapter 11 ,
Denial of Certiorari ,
Fraud ,
Investment Funds ,
Investors ,
Ponzi Scheme ,
SCOTUS ,
SIPA
In In re Arcapita Bank B.S.C., 2021 WL 1603608 (Bankr. S.D.N.Y. Apr. 23, 2021), the U.S. Bankruptcy Court for the Southern District of New York addressed the interaction between purported setoff rights arising under...more
In This Issue:
First Impressions: Third Circuit Scuttles Triangular Setoff in Bankruptcy -
In In re Orexigen Therapeutics, Inc., 990 F.3d 748 (3d Cir. 2021), the U.S. Court of Appeals for the Third Circuit ruled as a...more
5/27/2021
/ Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Chapter 7 ,
Commercial Bankruptcy ,
Corporate Restructuring ,
Debt Restructuring ,
Leveraged Buyout ,
Mootness ,
Mutuality ,
Safe Harbors
It is generally recognized that a bankruptcy court has the power—either equitable or statutory—to recharacterize a purported debt as equity if the substance of the transaction belies the labels the parties have given it. A...more
In In re Nuverra Environmental Solutions, Inc., 834 Fed. App'x 729 (3d Cir. 2021), the U.S. Court of Appeals for the Third Circuit handed down a long-awaited ruling that could have addressed, but ultimately did not address,...more
In a leading precedent handed down in 2018—Sabine Oil & Gas Corp. v. Nordheim Eagle Ford Gathering, LLC (In re Sabine Oil & Gas Corp.), 734 Fed. Appx. 64 (2d Cir. May 25, 2018)—the U.S. Court of Appeals for the Second Circuit...more
The ability of a bankruptcy trustee or chapter 11 debtor-in-possession ("DIP") to obtain credit or financing during the course of a bankruptcy case is often crucial to the debtor's prospects for either maintaining operations...more
Postpetition financing provided by pre-bankruptcy shareholders or other "insiders" is not uncommon in chapter 11 cases as a way to fund a plan of reorganization and allow old shareholders to retain an ownership interest in...more
In Hafen v. Adams (In re Hafen), 616 B.R. 570 (B.A.P. 10th Cir. 2020), a bankruptcy appellate panel from the Tenth Circuit ("BAP") held that the bankruptcy court is the only court with subject-matter jurisdiction to decide...more
12/17/2020
/ Article III ,
Bankruptcy Appellate Panel (BAP) ,
Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Chapter 7 ,
Debtors-in-Possession ,
Exclusive Jurisdiction ,
Fraudulent Transfers ,
Standing ,
Statutory Authority ,
Subject Matter Jurisdiction
A basic tenet of bankruptcy law, premised on the legal separateness of a debtor prior to filing for bankruptcy and the estate created upon a bankruptcy filing, is that prepetition debts are generally treated differently than...more
12/14/2020
/ Administrative Expenses ,
Appeals ,
Appellate Courts ,
Bankruptcy Code ,
Bankruptcy Court ,
Chapter 7 ,
Commercial Bankruptcy ,
Corporate Taxes ,
Department of Justice (DOJ) ,
Income Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Tax Liability ,
Tax Returns