Bankruptcy Code

News & Analysis as of

Pay to Play: §327(a) Professionals Pay their Own Defense Costs in Litigation Challenging Fee Applications

On June 15, 2015, the Supreme Court of the United States made clear that attorneys and other professionals hired under §327(a) of the Bankruptcy Code are not entitled to fees for their time spent litigating a §330(a)(1) fee...more

Meet the New Sharif: Bankruptcy Court Jurisdiction in the Wake of Wellness International

The 1978 Bankruptcy Code was hailed as a comprehensive bankruptcy overhaul, designed, in part, to eliminate the uncertainty as to which matters could be handled by a bankruptcy referee depending on the outcome of a summary...more

Supreme Court Further Clarifies Stern v. Marshall

As we have previously discussed, the Supreme Court held in Stern v. Marshall that Congress did not have the authority under the Constitution to empower bankruptcy judges to decide legal claims that are based entirely on state...more

Third Circuit Approves Use Of Structured Dismissals Of Chapter 11 Bankruptcies, but Rarely

On May 21, 2015, the United States Court of Appeals for the Third Circuit approved the settlement and dismissal of chapter 11 bankruptcy cases through a structured dismissal in rare instances. See Official Committee of...more

Despite Changing Economic Reality, Federal Court Holds Indian Tribes Have Sovereign Immunity in Bankruptcy, Absent Waiver

As the Indian gaming industry continues to thrive, Indian tribes are increasingly engaging in other commercial endeavors including banking, construction, energy, telecommunications, manufacturing, retail and more. Based on a...more

Bankruptcy Beat: Bankruptcy Court Finds Debt To Third Party To Be A Non-Dischargable Debt Incurred In Connection With a Divorce

Bankruptcy Judge Albert Dabrowski was faced with a unique set of circumstances arising as a result of the intersection of a state court divorce action and a Chapter 7 bankruptcy case. In the matter of Corrine Sawyer v. Scott...more

The ABI Commission on Business Bankruptcy Reform: Paying "Critical Vendors" - Will Congress Finally Act?

This is the second in a series of Alerts regarding the proposals made by the American Bankruptcy Institute’s Select Commission to Reform Chapter 11 Business Bankruptcies. It covers the Commission’s recommendations about the...more

Supreme Court’s Denial of Cert Preserves Safe Harbor for Madoff Victims

Yesterday, the Supreme Court denied two petitions for certiorari filed by Irving H. Picard—the Trustee for the estate of Bernard L. Madoff Investment Securities (“Madoff Securities”)—and the Securities Investor Protection...more

Recent Unanimous Supreme Court Decision Holds That Underwater Mortgages in a Chapter 7 Cannot be “Stripped off"

The Issue and Background - Debtors David Caulkett and Edelmiro Toledo-Cardona (“Debtors”) each filed for Chapter 7 bankruptcy relief with “underwater” junior mortgages held by Bank of America, N.A. (“Bank”). In other...more

Raising a Drawbridge Objection: Eligibility in Chapter 15 Cross-Border Insolvency Cases

Insolvency like international law can lend itself to aggressive protectionism as parties or countries try to preserve their own interests, like medieval lords surrounded their castles with moats and towering walls to fend off...more

Becoming a Creditor in a Bankruptcy Case Triggers a Duty to Preserve Documents

A litigator in bankruptcy court is challenged with mastery of a trial lawyer’s skills as well as the developing substantive law, jurisdictional and otherwise, governed by the Bankruptcy Code. Who hasn’t heard of Stern v....more

Baker Botts v. Asarco: The Supreme Court Shows Again That It Really Doesn’t Understand Corporate Bankruptcy Cases

The Supreme Court has not handled its recent major bankruptcy decisions well. The jurisdictional confusion engendered by its 2011 decision in Stern v. Marshall was only partially clarified by this term’s opinion in Wellness...more

Supreme Court Update: Kerry V. Din (13-1402), Mata V. Lynch (14-185) And Baker Botts V. Asarco (14-103)

The Court took care of some additional throat-clearing on Monday, handing down three decisions: Kerry v. Din (13-1402), holding that no additional process was due a U.S. citizen whose husband's visa application was denied;...more

Did Justice Thomas Foreshadow the Downfall of Obamacare in Baker Botts?

By no means do we think that we might reliably predict the outcome of such a politically charged case as King v. Burwell, No. 14-114, the latest challenge to the Affordable Care Act. But for those who like to read tea...more

The ABI Commission on Business Bankruptcy Reform: Director and Officer Fiduciary Duties and Lender Liability

Will Congress Finally Act? This is the third in a series of Alerts regarding the proposals made by the American Bankruptcy Institute’s Commission to Reform Chapter 11 Business Bankruptcies. It covers the Commission’s...more

Seventh Circuit Says Violations of Wisconsin’s Theft-by-Contractor Statute Are Not Dischargeable in Bankruptcy

The Bankruptcy Code prevents an individual debtor from discharging certain debts, including, upon request of the creditor, debts for “fraud or defalcation while acting in a fiduciary capacity.” 11 U.S.C. § 523(a)(4). The...more

Cramdown Hurdles Round 3: Try, Try Again

In re Ramz Real Estate Co., LLC, 510 B.R. 712 (Bankr. S.D.N.Y. 2013) – An undersecured mortgagee objected to a debtor’s proposed plan of reorganization on several grounds, including that (1) the plan was not approved by...more

Supreme Court Decides Baker Botts L.L.P. v. ASARCO LLC

On June 15, 2015, the U.S. Supreme Court decided Baker Botts L.L.P. v. ASARCO LLC, No. 14-103, holding that § 330(a)(1) of the Bankruptcy Code does not permit bankruptcy courts to award fees that § 327(a) professionals incur...more

"Strip, Strip Hooray!" - Supreme Court Settles Chapter 7 Lien-Stripping Debate

Twenty-three years after initially visiting the issue, the United States Supreme Court has recently settled what some would call “the single most important unresolved issue in consumer bankruptcy” - whether Chapter 7 permits...more

Orrick's Financial Industry Week in Review

SEC Provides Additional Analysis Related to Proposed Pay Ratio Disclosure Rules - On June 4, the Securities and Exchange Commission provided additional analysis related to its proposed rules for pay ratio disclosure. The...more

SCOTUS: Debtor Entitled to Chapter 13 Conversion Leftovers

The U.S. Supreme Court has resolved a circuit split by answering the question; what happens to post-petition wages held by a Chapter 13 trustee at the time a case is converted from Chapter 13 to a Chapter 7? In a unanimous...more

United States Supreme Court Holds that Order Denying Plan Confirmation Is Not Immediately Appealable

On May 4, 2015, the Supreme Court for the United States unanimously held that an order denying confirmation of a plan is not a “final” order subject to immediate appeal as a matter of right. Although the Bullard decision...more

Third Circuit Approves a Structured Dismissal that Allows Debtor to Skip Payments to Certain Creditors

The Third Circuit recently affirmed a bankruptcy court's approval of a joint settlement and structured dismissal of a chapter 11 case that did not comply with the priority scheme under the Bankruptcy Code by providing payment...more

U.S. Supreme Court Holds that Out of the Money Mortgages Cannot be Stripped Off in Chapter 7 Bankruptcy Cases

The U.S. Supreme Court held that a secured creditor in a chapter 7 bankruptcy case is protected from having its lien “stripped off” even if the collateral securing its claim is worth less than the claims asserted by a senior...more

Supreme Court Update: Elonis V. United States (13-983), Taylor V. Barkes (14-939) And Bank Of America V. Caulkett (13-1421)

The Court handed down four opinions and a summary reversal to kick off the busiest month of the term. This update will cover Elonis v. United States (13-983), the much anticipated "Facebook threats" case, along with Taylor v....more

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