The practice of conferring "derivative standing" on official creditors' committees to assert claims on behalf of a bankruptcy estate in cases where the debtor or a bankruptcy trustee is unwilling or unable to do so is a...more
10/21/2020
/ Bankruptcy Code ,
Breach of Duty ,
Chapter 11 ,
Chapter 7 ,
Commercial Bankruptcy ,
Creditors ,
Debtors-in-Possession ,
Equitable Subordination ,
Limited Liability Company (LLC) ,
Real Party in Interest ,
Standing
"Cramdown" chapter 11 plans, under which a bankruptcy court confirms a plan over the objection of a class of creditors, are relatively common. Less common are the subset of cramdown plans known as "cram-up" chapter 11 plans....more
10/21/2020
/ Bankruptcy Code ,
Borrowers ,
Change of Control ,
Chapter 11 ,
Charter Communications ,
Commercial Bankruptcy ,
Cram Up ,
Cramdown ,
Credit Agreements ,
Creditors ,
First-Lien ,
Ipso Facto Clauses ,
Reorganizations ,
Senior Lenders ,
Special Purpose Entities
In This Issue:
Eighth Circuit Rules that Bankruptcy Code's Cap on Lease Damage Claims Applies to Fraudulent Transfer Judgment -
In Lariat Cos. v. Wigley (In re Wigley), 951 F.3d 967 (8th Cir. 2020), the U.S. Court of...more
9/1/2020
/ Bankruptcy Plans ,
Commercial Bankruptcy ,
Consumer Bankruptcy ,
Corporate Restructuring ,
Creditors ,
Debtors ,
Force Majeure Clause ,
Reorganizations ,
Safe Harbors ,
Securities Transactions ,
Successor Liability
Valuation is a critical and indispensable part of the bankruptcy process. How collateral and other estate assets (and even creditor claims) are valued will determine a wide range of issues, from a secured creditor's right to...more
The ability of a bankruptcy trustee or chapter 11 debtor-in-possession ("DIP") to sell assets of the bankruptcy estate "free and clear" of "any interest" in the property asserted by a non-debtor is an important tool designed...more
9/1/2020
/ Bankruptcy Code ,
Chapter 11 ,
Chapter 7 ,
Commercial Bankruptcy ,
Creditors ,
Debtors-in-Possession ,
Employee Retirement Income Security Act (ERISA) ,
Reorganizations ,
Section 363 ,
Successor Liability ,
Withdrawal Liability
Appointment of PROMESA Financial Oversight Board Was Constitutional -
In Financial Oversight and Management Board for Puerto Rico v. Aurelius Investment, LLC, No. 18-1334, 590 U.S. ___ (June 1, 2020), the Supreme Court...more
8/31/2020
/ Appointments Clause ,
Article III ,
Aurelius Investment LLC v Puerto Rico ,
Commercial Bankruptcy ,
Congressional Authority ,
Constitutional Challenges ,
Creditors ,
De Facto Officer Doctrine ,
Debtors ,
Extraterritoriality Rules ,
Financial Oversight and Management Board (Oversight Board) ,
Financial Oversight and Management Board for Puerto Rico v Aurelius Investment LLC ,
Officers of the United States ,
Puerto Rico ,
Puerto Rico Oversight Management and Economic Stability Act (PROMESA) ,
SCOTUS
In In re Rogers Morris, 2020 WL 1321894 (Bankr. N.D. Miss. Mar. 16, 2020), the U.S. Bankruptcy Court for the Northern District of Mississippi contributed to an existing split among the courts by joining the majority view in...more
8/31/2020
/ Automatic Stay ,
Bankruptcy Code ,
Bankruptcy Court ,
Bankruptcy Plans ,
Chapter 12 ,
Creditors ,
Equitable Subordination ,
Inequitable Conduct ,
Motion for Relief from Automatic Stay ,
Reorganizations ,
Section 553 ,
Setoff Rights
It is generally well understood that an "oversecured" creditor is entitled to interest and, to the extent provided for under a loan agreement, related fees and charges as part of its secured claim in a bankruptcy case....more
To prevent landlords under long-term real property leases from reaping a windfall for future rent claims at the expense of other creditors, section 502(b)(6) of the Bankruptcy Code caps the amount of a landlord's claims...more
In Taggart v. Lorenzen, 139 S. Ct. 1795 (June 3, 2019), the U.S. Supreme Court ruled that a bankruptcy court may hold a creditor in civil contempt for attempting to collect on a debt that has been discharged in bankruptcy "if...more
6/2/2020
/ Appeals ,
Attorney's Fees ,
Bankruptcy Appellate Panel (BAP) ,
Bankruptcy Code § 524(a) ,
Bankruptcy Discharge Order ,
Chapter 7 ,
Civil Contempt Orders ,
Concurrent Litigation ,
Creditors ,
Dischargeable Debts ,
Injunctive Relief ,
Money Judgment ,
Reasonable Belief Test ,
Remand ,
Reversal ,
SCOTUS ,
Standard of Review ,
Statutory Violations ,
Strict Liability ,
Taggart v Lorenzen ,
Vacated
In In re Energy Future Holdings Corp., 2019 WL 2535700 (3d Cir. June 19, 2019), a panel of the U.S. Court of Appeals for the Third Circuit ruled that adequate protection payments made during a bankruptcy case and...more
On June 3, 2019, the U.S. Supreme Court ruled in Taggart v. Lorenzen, 139 S. Ct. 1795 (2019), that a bankruptcy court may hold a creditor in civil contempt for attempting to collect on a debt that has been discharged in...more
8/21/2019
/ Appeals ,
Attorney's Fees ,
Bankruptcy Appellate Panel (BAP) ,
Bankruptcy Code § 524(a) ,
Bankruptcy Discharge Order ,
Chapter 7 ,
Civil Contempt Orders ,
Concurrent Litigation ,
Creditors ,
Dischargeable Debts ,
Injunctive Relief ,
Money Judgment ,
Reasonable Belief Test ,
Remand ,
Reversal ,
SCOTUS ,
Standard of Review ,
Statutory Violations ,
Taggart v Lorenzen ,
Vacated
In In re Tribune Co. Fraudulent Conveyance Litig., 2019 WL 1771786 (S.D.N.Y. Apr. 23, 2019), the U.S. District Court for the Southern District of New York denied a litigation trustee’s motion to amend a complaint seeking to...more
6/19/2019
/ Avoidance ,
Bankruptcy Code ,
Chapter 11 ,
Commercial Bankruptcy ,
Creditors ,
Debtors ,
Financial Institutions ,
Fraudulent Transfers ,
Intermediaries ,
Leveraged Buyout ,
Merit Management Group v FTI Consulting ,
Safe Harbors ,
SCOTUS ,
Section 546(e) ,
Split of Authority ,
Trustees
Rumors of another recession multiplied as the tumultuous second year of the Trump administration came to a close. Highlights of 2018 included a simmering trade war with China; political upheaval after the House of...more
In a highly anticipated decision, the U.S. Court of Appeals for the Fifth Circuit recently affirmed a bankruptcy court order dismissing a chapter 11 case filed by a corporation without obtaining—as required by its corporate...more
10/11/2018
/ Acquisitions ,
Automatic Stay ,
Bankruptcy Court ,
Borrowers ,
Chapter 11 ,
Controlling Stockholders ,
Corporate Charters ,
Creditors ,
Delaware General Corporation Law ,
Fiduciary Duty ,
Forbearance Agreements ,
Franchises ,
Lenders ,
Mergers ,
Private Equity ,
Public Policy
In Crystallex International Corp. v. Petróleos de Venezuela, S.A., 879 F.3d 79 (3d Cir. 2018), a divided U.S. Court of Appeals for the Third Circuit ruled that transfers by nondebtor subsidiary corporations to their ultimate...more
6/8/2018
/ Aiding and Abetting ,
Alter Ego ,
Arbitration ,
Avoidance ,
Bankruptcy Code ,
Business Assets ,
Creditors ,
Cross-Border ,
DE Supreme Court ,
Debtors ,
Fraudulent Transfers ,
Statutory Interpretation ,
Subsidiaries ,
UFTA ,
Venezuela
In determining whether a U.S. bankruptcy court should provide the representative of a foreign debtor with various forms of assistance in a case under chapter 15 of the Bankruptcy Code, the court must consider, consistent with...more
4/19/2018
/ Bankruptcy Code ,
Bankruptcy Court ,
Chapter 15 ,
Choice-of-Law ,
Creditors ,
Debtors ,
Foreign Debt ,
Foreign Jurisdictions ,
Insolvency ,
Jurisdiction ,
The Model Law ,
Venue
The initial year of the Trump administration colored much of the political, business, and financial headlines of 2017, both in the U.S. and abroad. Key administration-related developments in 2017 included U.S. withdrawal from...more
2/5/2018
/ Administrative Appointments ,
Banking Sector ,
Bankruptcy Code ,
Bitcoin ,
Chapter 11 ,
Chapter 15 ,
Climate Change ,
Commercial Bankruptcy ,
Creditors ,
Cross-Border ,
Cryptocurrency ,
Cybersecurity ,
Debt Restructuring ,
EU ,
Financial Institutions ,
Fiscal Year ,
Germany ,
Global Economy ,
Insolvency ,
International Tax Issues ,
Legislative Agendas ,
NAFTA ,
Natural Disasters ,
Natural Resources ,
Net Neutrality ,
Netherlands ,
Oil & Gas ,
Pensions ,
Puerto Rico Oversight Management and Economic Stability Act (PROMESA) ,
Regulatory Agenda ,
Regulatory Oversight ,
Russia ,
Singapore ,
Sovereign Debt ,
Trump Administration
In Clark’s Crystal Springs Ranch, LLC v. Gugino (In re Clark), 692 Fed. Appx. 946, 2017 BL 240043 (9th Cir. July 12, 2017), the U.S. Court of Appeals for the Ninth Circuit ruled that: (i) the remedy of "substantive...more
In In re Millennium Lab Holdings II, LLC, 2017 BL 354864 (Bankr. D. Del. Oct. 3, 2017), the U.S. Bankruptcy Court for the District of Delaware ruled that it had the constitutional authority to grant nonconsensual third-party...more
11/22/2017
/ Appeals ,
Chapter 11 ,
Commercial Bankruptcy ,
Creditors ,
False Claims Act (FCA) ,
Non-Consensual Rights ,
Proof of Claims ,
Racketeering ,
Remand ,
Section 363 ,
Stern v Marshall ,
Third-Party Release Agrements
In Assured Guaranty Corp. v. Fin. Oversight & Mgmt. Bd. for Puerto Rico, 872 F.3d 57 (1st Cir. 2017), the U.S. Court of Appeals for the First Circuit ruled that section 1109(b) of the Bankruptcy Code gave an unsecured...more
In Feltman v. Noor Staffing Grp., LLC (In re Corp. Res. Servs. Inc.), 564 B.R. 196 (Bankr. S.D.N.Y. 2017), the bankruptcy court considered whether section 553 of the Bankruptcy Code creates a right of setoff when no such...more
Section 510(b) of the Bankruptcy Code provides a mechanism designed to preserve the creditor/shareholder risk allocation paradigm by categorically subordinating most types of claims asserted against a debtor by equityholders...more
8/15/2017
/ Absolute Priority Rule ,
Bankruptcy Code ,
Commercial Bankruptcy ,
Creditors ,
Debt Restructuring ,
Employee Stock Purchase Plans ,
Equitable Relief ,
Lehman Brothers ,
Lien Priority ,
Qualified Restricted Stock Units (RSUs) ,
Recharacterization ,
Restricted Stocks ,
Risk Allocation ,
Section 502 ,
Section 510 ,
Shareholders ,
Subordination Agreement
Among the required elements of a claim to avoid a preferential transfer under section 547(b) of the Bankruptcy Code is that, if the creditor-transferee were permitted to retain a pre-bankruptcy payment, it would end up being...more
5/31/2017
/ Bankruptcy Code ,
Chapter 11 ,
Chapter 7 ,
Creditors ,
Debtors ,
Executory Contracts ,
Managed Custody Accounts (MCAs) ,
Preferences ,
Preferential Transfers ,
Section 365 ,
Trustees