News & Analysis as of

Bankruptcy Court Involuntary Bankruptcy

Miller Canfield

Bankruptcy Dollar Amounts Set to Rise Significantly on April 1, 2025

Miller Canfield on

Every three years on April 1, the dollar amounts in the Bankruptcy Code are adjusted to account for inflation. The April 1, 2025, increase will be approximately 13.2%, even larger than the nearly 11% increase three years ago....more

Pillsbury Winthrop Shaw Pittman LLP

When It Counts: Fully Secured and Paid-Off Creditors Can Count as Petitioning Creditors for Involuntary Bankruptcy Petitions

In a recent pair of decisions, the Ninth Circuit Bankruptcy Appellate Panel held that even fully secured creditors with nonrecourse claims and unsecured creditors who are paid off after the involuntary petition may qualify as...more

Troutman Pepper Locke

Can I Be Held Liable as a Petitioning Creditor When an Involuntary Bankruptcy Is Dismissed? - Creditor’s Rights Toolkit

Troutman Pepper Locke on

An involuntary bankruptcy can be a powerful tool in a creditor’s arsenal. Involuntary bankruptcies are rarely filed, however, because of the significant risk of liability for the petitioning creditor if the case is dismissed....more

Patterson Belknap Webb & Tyler LLP

Eighth Circuit Issues Decision on Involuntary Bankruptcy Case and Damages Arising from a Bad Faith Filing

An appeals court has issued an insightful decision on the availability of damages when an involuntary bankruptcy petition is filed in bad faith. See Stursberg v. Morrison Sund PLLC, No. 23-1186, 2024 U.S. App. LEXIS 20286...more

Troutman Pepper Locke

What Is an Assignment for the Benefit of Creditors and How Does It Differ From a Bankruptcy? - Creditor’s Rights Toolkit

Troutman Pepper Locke on

An assignment for the benefit of creditors (ABC) is a process by which a financially distressed company (referred to as the assignor) transfers its assets to a third-party fiduciary (referred to as the assignee). The assignee...more

Troutman Pepper Locke

What Is an Involuntary Bankruptcy and How Can Creditors Use This Powerful Tool? - Creditor’s Rights Toolkit

Troutman Pepper Locke on

In most bankruptcies, the company decides to file for relief. In involuntary bankruptcies, creditors force the company into bankruptcy. Involuntary petitions are an extreme remedy, and therefore the requirements and standards...more

Ward and Smith, P.A.

740,000 Reasons to Think Twice Before Putting a Company in Bankruptcy

Ward and Smith, P.A. on

A recent decision from a bankruptcy court in Delaware provides a cautionary tale about the risks of involuntary bankruptcy.  In the Delaware case, the debtor managed a group of investment funds. The business was all but...more

Lowenstein Sandler LLP

Must See TV Azteca! Bankruptcy Court Dismisses Involuntary Petition Based on Partially Diputed Claims

One of the requirements for an involuntary filing is that the creditors seeking relief (referred to as “petitioning creditors”) must each have a claim that is not subject to a “bona fide dispute as to liability or amount.”...more

Nelson Mullins Riley & Scarborough LLP

The Sea Pines Bankruptcy Case

In the fall of 1986, a number of involuntary bankruptcy petitions were filed in the United States Bankruptcy Court for the Southern District of New York against certain debtor companies that owned and operated 40% to 60%...more

Bowditch & Dewey

Six Questions About Involuntary Bankruptcy

Bowditch & Dewey on

Trying to collect money from someone who cannot or will not pay you is frustrating. That old chestnut about throwing good money after bad comes to mind. Placing an individual or firm (your “debtor”) into bankruptcy is a...more

Patterson Belknap Webb & Tyler LLP

Federal Appeals Court Rules on Requirements for Involuntary Bankruptcy

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

Patterson Belknap Webb & Tyler LLP

Close Enough: Fifth Circuit Holds That Section 510(B) of the Bankruptcy Code Requires Subordination of Payments That “Look a Lot...

In 1930, Clarence Bennett’s wealthy uncle died. He left behind shares in Berry Holding Company ("BHC") that were subdivided into three groups. Bennett was the beneficiary of dividends paid out of one of these groups and, for...more

Perkins Coie

Current Trends in China’s Bankruptcy Filings

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This update outlines the current trends in China’s bankruptcy filings based on surveys and data of bankruptcy court cases released by the Supreme People’s Court (SPC) in the past five years. Historically, China’s economy...more

Womble Bond Dickinson

Trustee Survives Judgment in Fraudulent-Conveyance Action Based on Novation Argument

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The Sixth Circuit recently ruled that a trustee’s claim that a novation occurred upon the execution of amended and restated loan documents could not be dismissed under a Rule 12 (b)(6) motion. The Sixth Circuit remanded the...more

A&O Shearman

(In)Eligible Filer: Bankruptcy Court Dismisses Involuntary Bankruptcy Filing Against Taberna for Failure of Non-Recourse Creditors...

A&O Shearman on

On November 8, 2018, the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) issued a decision dismissing an involuntary chapter 11 case filed against Taberna Preferred Funding IV,...more

Patterson Belknap Webb & Tyler LLP

Punitive Damages for Involuntary Bankruptcy Petitions Filed in Bad Faith are Ineligible for Setoff

We generally advise clients to think carefully before commencing an involuntary bankruptcy petition against an alleged debtor. One of the primary reasons for our caution is section 303(i) of the Bankruptcy Code, which...more

Patterson Belknap Webb & Tyler LLP

Dispute Evolution: A bona fide dispute regarding claim amount may disqualify creditor from maintaining an involuntary case.

Section 303(b)(1) of the Bankruptcy Code generally requires three petitioning creditors to join an involuntary petition, each of which must hold claims against the debtor that are not contingent as to liability and are not...more

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