News & Analysis as of

Creditors Contract Terms Commercial Bankruptcy

Troutman Pepper Locke

What Happens to Employment Agreements and Noncompete Agreements in Bankruptcy? - Creditor’s Rights Toolkit

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An employer’s bankruptcy filing can significantly impact an employee’s agreements with the debtor. While a reorganizing debtor may agree to continue honoring its obligations under employment agreements, the Bankruptcy Code...more

Jones Day

Avianca: Second Court Adopts "Billing Date" Approach to Timely Performance of Unexpired Commercial Personal Property Leases in...

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In 1984 and 1994, Congress amended the Bankruptcy Code to add protections for commercial real property and equipment lessors. Those provisions—sections 365(d)(3) and section 365(d)(5), respectively—generally require a...more

Eversheds Sutherland (US) LLP

Preference pitfalls for Merchant Cash Advances—Lessons from the Southern District of New York

Merchant cash advance (MCA) funding provides a quick, “non loan” alternative for small businesses desiring to access additional capital, and its use has become prevalent in the last decade. Given the speed at which MCA...more

Lathrop GPM

Bankruptcy Court Refuses to Enforce Pre-Petition Waiver of the Automatic Stay

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A recent decision by the U.S. Bankruptcy Court for the Southern District of Illinois underscores that creditors must exercise caution in relying on pre-petition waivers of the automatic stay in collection actions. ...more

Jones Day

Chapter 11 Filing Without Consent of Independent Director Dismissed as Unauthorized

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Courts disagree over whether provisions in a borrower's organizational documents or loan agreements designed to restrict or prevent the borrower from filing for bankruptcy are enforceable as a matter of federal public policy...more

Jones Day

Delaware Bankruptcy Court: Applying Credit Pressure on Financially Distressed Debtor Scuttles Ordinary Course Payment Preference...

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The power of a bankruptcy trustee or chapter 11 debtor-in-possession ("DIP") to avoid pre-bankruptcy preferential transfers is an important tool designed to promote the bankruptcy policy of equality of distribution and to...more

Clark Hill PLC

How Bankruptcy Courts Interpret Intercreditor Agreements: The Uncertainty of Judicial Perspective

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Intercreditor Agreements typically are contractual arrangements among lenders of similar or differing priorities to a single borrower secured by the assets of the borrower, often including real estate assets. These multiple...more

Nelson Mullins Riley & Scarborough LLP

Make-Whole Premiums in Bankruptcy: Clarity in Drafting, Certainty in Recovery

In the world of commercial lending, certain contract provisions often go unnoticed—until the moment they matter most. Make-whole premiums are one such example. Typically tucked deep in loan agreements, these provisions are...more

Proskauer Rose LLP

Enforceability of Golden Directors with Bankruptcy Consent Right

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The appointment of an independent director is a powerful tool for private credit lenders. The appointment is designed to introduce a voice of neutrality and fairness into the board’s decision-making process with the hope and...more

Stark & Stark

4 Lease Auction Tips for Landlords

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During a retail bankruptcy, commercial landlords often face challenges when their tenants try to maximize the value of the bankrupt estate by holding lease auctions. Despite lease provisions that may restrict or prohibit a...more

Morrison & Foerster LLP

Latest Uptier Decisions in Serta and Mitel Remind Contract Language Matters

The caselaw on “uptiers” as liability management exercises (LMEs) grew by two opinions on the last day of 2024. In Serta, the Fifth Circuit reversed the bankruptcy court’s blessing of the pre-bankruptcy uptier and...more

Walkers

Jersey Company Law Series: Migration / Continuation – Moving companies to and from Jersey

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Effects of a company migration into - Jersey Steps to migrate a company out of Jersey...more

Troutman Pepper Locke

Are the Bankruptcy and Insolvency Provisions in My Contract Enforceable? - Creditor’s Rights Toolkit

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Parties often include bankruptcy and insolvency provisions in their agreements to protect themselves should the contract counterparty file for bankruptcy or take other insolvency-related steps. While many of these provisions...more

Mintz - Bankruptcy & Restructuring Viewpoints

In re Weinstein and Mallinckrodt: Implications for Royalty Financings, M&A Earn-Outs, and Other Transactions Involving Future...

Deal structure matters, particularly in bankruptcy. The Third Circuit recently ruled that a creditor’s right to future royalty payments in a non-executory contract could be discharged in the counterparty-debtor’s bankruptcy....more

Mayer Brown

The Right of Set-off in Insolvency Proceedings

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The right to set off a claim is a legal concept through which reciprocal claims between a creditor and a debtor company are settled against each other reducing or extinguishing the smaller claim and leaving only a balance...more

Troutman Pepper Locke

Who Is the Claims Agent and What Type of Information Can I Obtain on Their Website? - Creditor’s Rights Toolkit

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Troutman Pepper's Creditor’s Rights Toolkit is a series that provides practical insights to help creditors confront the challenges of commercial bankruptcy. A claims agent is a third party retained by the debtor to take on...more

Williams Mullen

Distressed Clients? Struggling Suppliers? Recession Risks? 7 Practical Considerations to Protect Your Bottom Line

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​​​​​​​Customers and suppliers may not willingly admit they are in distress, even when sources of economic pressure can be found everywhere. However, there are some practical steps you can take to increase your situational...more

Goodwin

Intercreditor Agreements and the Bankruptcy Code

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There is no set of fixed rules when negotiating intercreditor arrangements as every deal is fact-specific, generally subject to significant negotiation and ultimately dependent on competing business rationales and negotiating...more

BCLP

The bankruptcy Pegasus: stalking horse agreements in aviation

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The bankruptcy Pegasus: stalking horse agreements in aviation - The Covid-19 pandemic has had a significant impact on the aviation industry, with regular international travel being halted for prolonged periods since March...more

Jones Day

"Work-for-Hire" Film Production Agreement Not Executory Contract in Bankruptcy Due to Lack of Mutual Continuing Material...

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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

Morgan Lewis - Power & Pipes

Delaware Bankruptcy Court Finds Violation of the Automatic Stay with Reservation of Rights Letters Sent to Non-Debtors

US Bankruptcy Judge Mary F. Walrath of the District of Delaware entered an order on April 21 in In re Nine Point Energy Holdings, Inc., Case No. 21-10570 (MFW) (Bankr. D. Del. Apr. 21, 2021), finding that Caliber Measurement...more

Cozen O'Connor

Yeah, About That Consignment Agreement … How You Can Lose Your Goods in a Retail Bankruptcy

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You just heard a rumor that your largest retail customer is in financial distress and may file for bankruptcy. After a moment of panic, you review your consignment agreement with the retailer (this assumes that you have a...more

Greenberg Glusker LLP

To Ship or Not to Ship: 3 FAQ’s for Creditors Seeking Guidance Before or During a Retail Bankruptcy

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COVID-19 has impacted an already shaky retail industry and pushed some of its participants into a rapid-fire series of bankruptcy filings. Although there was already a long list of prominent retail bankruptcies over the past...more

Spilman Thomas & Battle, PLLC

The Use of Receiverships in Pre-Bankruptcy Litigation

As we continue our series on bankruptcy litigation, we want to discuss the use of receiverships as an important aspect of a fully developed creditors' rights practice. Creditors often face recalcitrant corporate debtors who...more

Mayer Brown

Bankruptcy trustee appeals Seventh Circuit’s ruling on sufficiency of UCC collateral description to US Supreme Court

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Last October we highlighted an important ruling issued in September 2019 by the Seventh Circuit in the bankruptcy proceeding of In re I80 Equipment, LLC. The Circuit Court in that case reversed a decision from the lower...more

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