News & Analysis as of

Disallowance Defense

Rivkin Radler LLP

New York Tax Continues to Inconvenience Nonresidents Working Remotely

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Last Friday, New York’s Governor Hochul delivered the following remarks at the annual meeting of the Business Council of New York State:“Someone asked me today, are we going to raise income taxes? I said, ‘I’m not raising...more

Holland & Knight LLP

NBAA Article Explains IRS Stance on Entertainment Disallowance for Sole Proprietors

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The Internal Revenue Service (IRS) recently released Chief Counsel Advice (CCA) 2021-17-012 to explain that sole proprietor flights are generally not subject to the employer-provided aircraft rules in Internal Revenue Code...more

Patterson Belknap Webb & Tyler LLP

Losing Momentum: Houston Bankruptcy Court Holds that Make-Whole Claims are Not the Economic Equivalent of Unmatured Interest...

In December of last year, we wrote about the Fifth Circuit’s two decisions – Ultra I, from January 2019, and Ultra II, from December, which replaced Ultra I – regarding make-whole claims in the Ultra Petroleum bankruptcy...more

Jones Day

Bolstering the Majority Rule: Bankruptcy Court Holds that Adjudication of Avoidance Liability Is Prerequisite to Disallowance of...

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The U.S. Bankruptcy Court for the Eastern District of North Carolina recently added some weight to the majority rule on an issue that has long divided bankruptcy and appellate courts. In In re Southern Produce Distributors,...more

Sheppard Mullin Richter & Hampton LLP

Ninth Circuit Affirms that Liens Pass Through Bankruptcy Even if Underlying Claim is Disallowed

The Ninth Circuit on June 1 affirmed a key bankruptcy principle that liens may survive and “pass through” the bankruptcy process even if the underlying claim secured by the lien is disallowed. The facts in Lane v. The Bank...more

Patterson Belknap Webb & Tyler LLP

The Solvent Debtor Exception Lives . . . Probably: Fifth Circuit Withdraws Controversial Ruling, but Key Holding Remains

Ultra Petroleum entered bankruptcy in significant financial distress, but then – thanks to a spike in oil prices – the debtor’s fortunes changed almost literally overnight. It is generally accepted that a solvent debtor must...more

Jones Day

The Fifth Circuit Rules That a Make-Whole Premium Is Unmatured Interest Generally Disallowed in Bankruptcy

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In In re Ultra Petroleum Corp., 913 F.3d 533(5th Cir. 2019), the U.S. Court of Appeals for the Fifth Circuit ruled that a "make-whole," or "prepayment," premium owed on unsecured notes issued by a chapter 11 debtor...more

A&O Shearman

An Interesting Decision: Fifth Circuit Questions Whether Make-Wholes Should Be Disallowed as ‘Unmatured Interest’

A&O Shearman on

On January 17, 2019, the United States Court of Appeals for the Fifth Circuit issued a decision holding that “impairment” under a plan of reorganization does not arise even if a creditor is paid less than it would be entitled...more

Troutman Pepper Locke

Government’s Notice That It Questioned Certain Costs and Would Take ‘Appropriate Action’ Is Not a Notice of ‘Disallowance’ as...

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CB&I Areva Mox Servs., LLC v. United States, 2018 U.S. Claims Lexis 1549 (November 9, 2018) - Nearly two decades ago, the Department of Energy, National Nuclear Security Administration (“NNSA”) awarded a contract for the...more

Jones Day

Caveat Emptor—Anti-Assignment Clause Renders Transferred Claim Unenforceable

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Amid the explosion of trading in claims against distressed and bankrupt entities, courts in recent years have issued numerous rulings of interest to both buyers and sellers. Notable decisions have addressed, among other...more

Carlton Fields

Collection Practices Plaintiffs Try End Run Around Florida Punitive Damages Laws

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In Florida, debtor-side attorneys are asserting a novel legal argument to bring punitive damages claims at an earlier stage, pursuant to the civil remedies section of Florida’s Consumer Collection Practices Act, Section...more

Katten Muchin Rosenman LLP

Clouds on the Horizon for Claim Purchasers in the Third Circuit

In a decision of significance to the distressed claims trading community, the US Court of Appeals for the Third Circuit in In re KB Toys Inc. recently held that any risk or “cloud” of disallowance under the Bankruptcy Code...more

Morrison & Foerster LLP

Buyer Beware: Third Circuit Confirms Claims are Subject to Disallowance Despite Sale to Third Party

The Third Circuit in In re KB Toys, Inc. recently affirmed a decision of the Delaware District Court, holding that trade claims are subject to disallowance under section 502(d) of the Bankruptcy Code despite their subsequent...more

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