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Lenders › Chapter 11 › Limited Liability Company (LLC)

Jones Day

Chapter 11 Filing Without Consent of Independent Director Dismissed as Unauthorized

Jones Day on

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

Kilpatrick

When Provisions in a Loan and LLC Agreements Do Not Impermissibly Restrict a Bankruptcy Filing

Kilpatrick on

In In re 301 W North Avenue, LLC, 2025 WL 37897 (Bankr. N.D. Ill. 2025), a bankruptcy court recently addressed provisions in a loan agreement and limited liability company (“LLC”) operating agreement as to their effect on...more

Herbert Smith Freehills Kramer

And Another Lender Blocking Provision Bites the Dust, Texas Bankruptcy Court Rules

Herbert Smith Freehills Kramer on

One feature commonly seen in commercial lending transactions is a waiver of the borrower’s authority to file for bankruptcy without the consent of the lender. While such “blocking” provisions are generally upheld where the...more

Jones Day

Delaware Bankruptcy Court Rules that Bankruptcy Blocking Right in Debtor's Corporate Charter Violates Federal Public Policy

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Courts sometimes 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...more

Mintz - Bankruptcy & Restructuring Viewpoints

Bankruptcy Restrictions in Operating Agreement Held Unenforceable

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In In Re Lexington Hospitality Group, LLC, the United States Bankruptcy Court for the Eastern District of Kentucky thwarted a lender’s efforts to control whether its borrower could file bankruptcy. As a condition to the loan,...more

McGuireWoods LLP

Delaware Court Voids LLC Agreement Provision Giving Creditor Veto Over Bankruptcy

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A Delaware bankruptcy court has joined what appears to be a recent trend toward invalidating limited liability company operating agreement provisions that effectively afford lenders veto power over the LLC’s authority to file...more

Pullman & Comley, LLC

Appellate Court Notes

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Appellate Court Advance Release Opinions - AC36506 - Sidorova v. East Lyme Board of Education - Due to budget cuts, the Board of Education laid off the plaintiff who was a tenured French teacher. She sued for...more

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