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Restructuring and Insolvency Bulletin Issue 2 - 2017: An update on COMI shifting to take advantage of the best insolvency tools to...

by Dechert LLP on

The EU has taken aim at fraudulent or abusive forum shopping in the Recast Insolvency Regulation, acknowledging the potential for misuse by debtors seeking to take advantage of more flexible insolvency processes available in...more

Restructuring and Insolvency Bulletin Issue 2 - 2017: Offshore and off limits: SDNY Bankruptcy Court finds foreign transfer...

by Dechert LLP on

Can foreign transfers of a U.S. debtor be avoided under the Bankruptcy Code’s avoidance provisions? While the Bankruptcy Court for the Southern District of New York recently found that the answer is no, that court, as well as...more

Not so Stern: Delaware Bankruptcy Court Finds Authority To Approve Non-Consensual Third Party Releases; Stern Not Applicable

by Allen & Overy LLP on

On remand from an appeal to the United States District Court for the District of Delaware, Bankruptcy Judge Laurie Selber Silverstein penned a resounding and thoroughly reasoned sixty-nine page opinion holding that the...more

Client Alert: Vendor Section 503(b)(9) Administrative Priority Claims: When Goods are Received is Critical

Debtors in Chapter 11 proceedings rarely pay unsecured creditors a meaningful dividend on prepetition accounts receivable balances, much less pay them in full. In an era of aggressive lending to place capital in the market,...more

Equitable Mootness Doctrine Persists in Bankruptcy Appeals

In recent years, courts have become increasingly critical of the doctrine of equitable mootness, a judicially created abstention doctrine that allows appellate courts to dismiss appeals from a bankruptcy court’s confirmation...more

Supreme Court Declines to Resolve Circuit Split on Debt Recharacterization

On August 10, 2017, the U.S. Supreme Court rescinded the grant of certiorari in PEM Entities LLC v. Levin on the grounds that review had been “improvidently granted.” The case seemingly provided a perfect vehicle to resolve...more

A Pending Supreme Court Ruling Can’t Create a Claim that Doesn’t Currently Exist

After hearing oral argument at confirmation on August 30, 2017, the bankruptcy court for the Western District of Pennsylvania issued a written opinion in In re rue21, inc., et. al., Case No. 17-22045-GLT (Bankr. W.D. Pa....more

Safe harbour and ipso facto reforms pass through the Senate

by DLA Piper on

Another step has been taken towards the introduction of a safe harbour for directors of insolvent companies and limited stay on the operation of ipso facto clauses. Late on Monday evening, after some debate, the Senate passed...more

Seventh Circuit Denies Trustee a Second Bite at the Avoidance Apple

The Seventh Circuit recently held, in Grede v. FCStone, LLC, Nos. 16-1896 & 16-1916, 2017 WL 3470145 (7th Cir. Aug. 14, 2017), that (i) a transfer previously authorized by a bankruptcy court order cannot be avoided due to the...more

Delaware Bankruptcy Court Dismisses Claims Against Echo/RT Holdings In Raytrans Bankruptcy Case

by Fox Rothschild LLP on

In the recent decision of Klauder v. Echo/RT Holdings LLC (In re Raytrans Holding, Inc.), Adv. No. 15-50273 (CSS) (Del. Bankr. Aug. 10, 2017), Judge Sontchi granted Defendants’ Motion to Dismiss the Trustee’s Second Amended...more

Third Circuit Applies More Flexible Standard for WARN Exemption

The Third Circuit, in In re AE Liquidation, Inc., Case No. 16-2203 (3d Cir. Aug 04, 2017) held that the Debtors were not liable under the WARN Act for failing to warn employees of furloughs and layoffs until those furloughs...more

Third Circuit Ruling Impacts Oil & Gas Industry

by McCarter & English, LLP on

The United States Circuit Court of Appeals for the Third Circuit issued a decision that significantly affects the rights of upstream producers. Applying Delaware law, the Third Circuit explained that the upstream producers...more

Delaware Bankruptcy Court Approves Separate Classification and Disparate Gifted Consideration Between General Unsecured Creditors

The Delaware Bankruptcy Court, in In re Nuverra Environmental Solutions, Case No. 17-10949 (Bankr. Del. July 24, 2017), confirmed a chapter 11 plan of reorganization despite separate classification and disparate gifted...more

In Brief: Second Circuit Reaffirms Broad Scope of Bankruptcy Code’s Subordination of Shareholder Claims

by Jones Day on

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

Transfer To Non-Existent Corporation Held To Be A Transfer Nonetheless

by Allen Matkins on

Sometimes, the law is just weird. The case of PGA West Residential Ass’n, Inc. v. Hulven Int’l, Inc., Cal. Ct. App. Case No. E064270 (Aug. 9, 2017) is weirder than most. The lawsuit alleged that the defendant had tried to...more

Preferences Actions Filed In Univita Holdings LLC Bankruptcy Case

by Fox Rothschild LLP on

On July 19-21, 2017, David W. Carickhoff, in his capacity as Chapter 7 Trustee of the Estates of Univita Holdings, et al., filed approximately 46 complaints seeking the avoidance and recovery of allegedly preferential and/or...more

Success Fees - Technical Arguments Fail In The Face Of Broad Definitions

by Fox Rothschild LLP on

In a decision signed July 26, 2017 in the Nephrogenex bankruptcy (case 16-11074), Judge Gross of the Delaware Bankruptcy Court approved of the application of the Debtor’s investment banker for a success fee over the objection...more

Delaware Clarifies “Received” For Valuable 503(b)(9) Claims

by Cole Schotz on

Delaware’s Bankruptcy Court has recently issued two insightful opinions that impact a creditor’s ability to establish the “receipt” element of a valuable 503(b)(9) administrative expense priority claim. CASE 1: In re SRC...more

Derivative Complaints By Creditors Against Chapter 7 Trustees – They Don’t Tend To Go Very Far

by Fox Rothschild LLP on

In a decision signed July 17, 2017 in the Our Alchemy, LLC bankruptcy (case 16-11596), Judge Gross of the Delaware Bankruptcy Court granted a trustee’s partial motion to dismiss a complaint, holding that a creditor cannot...more

Could Supreme Court Case on Debt Recharacterization Provide a Pathway Out of the Stern v. Marshall Maze?

by Kelley Drye & Warren LLP on

The Supreme Court recently granted certiorari in PEM Entities LLC v. Levin, in which it will decide whether federal or a state law should apply when a debt claim held by a debtor’s insider is sought to be recharacterized in...more

Third Circuit Clarifies Definition of “Received” in Context of Section 503(b)(9) Claims 

The 2005 amendments to the Bankruptcy Code included the addition of an administrative expense claim for the value of goods received by the debtor in the 20 days prior to the bankruptcy filing. The allowance of an...more

Supreme Court To Hear Dispute Over Debt Recharacterization

One critical issue affecting complex restructuring cases are efforts by the estate or creditors to recharacterize debt into equity. This can happen in a variety of factual contexts, including where an existing equity...more

US Supreme Court confirms priority rules apply to a structured dismissal of a chapter 11 bankruptcy case

by DLA Piper on

In its recent decision Czyzewski v. Jevic Holding Corp., 137 S. Ct. 973 (2017), the United States Supreme Court held that a bankruptcy court may not approve a structured dismissal of a chapter 11 case that provides for...more

Blog: Controversial Safe Harbor: Supreme Court to Address Circuit Split of Clawback Protection in Bankruptcy Code

by Cooley LLP on

The Supreme Court recently agreed to review the applicability of the safe harbor provision in section 546(e) of the Bankruptcy Code after differing interpretations of the statute created a split among the circuit courts. The...more

Supreme Court to Decide Bankruptcy Test for Recharacterizing Insider Debt Claims

by Ropes & Gray LLP on

On June 27, 2017, the U.S. Supreme Court agreed to hear an appeal brought by Ropes & Gray of the Fourth Circuit’s decision in PEM Entities LLC v. Eric M. Levin & Howard Shareff. The Supreme Court’s decision in the case will...more

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