The “Catch-22” of Preference Law
The ordinary course of business, new value, and contemporaneous exchange for new value defenses are the most frequently used defenses in a preference action. However, there are additional, less common defenses that a...more
A debtor's non-exempt assets (and even the debtor's entire business) are commonly sold during the course of a bankruptcy case by the trustee or a chapter 11 debtor-in-possession ("DIP") as a means of augmenting the bankruptcy...more
Nelson Mullins reported on March 25 that the Fifth Circuit Court of Appeals, in Matter of S. Coast Supply Co., 91 F.4th 376 (5th Cir. 2024), held that preference claims arising under 11 U.S.C. § 547 may be sold, reversing the...more
In a March 2024 decision, the U.S. Bankruptcy Appellate Panel for the First Circuit (the “Panel”) followed existing case law prohibiting debtors in businesses related to cannabis from availing themselves of federal bankruptcy...more
Businesses in financial distress have multiple options to consider when attempting to reorganize or liquidate. A state court receivership or Chapter 7 Bankruptcy are likely options for liquidation when there are significant...more
The Fifth Circuit recently ruled that a debtor can sell a preferential transfer action under Bankruptcy Code section 363 to a purchaser that is not a representative of the bankruptcy estate. Briar Cap. Working Fund Cap.,...more
As we turn to a new year, my wife and I like to reminisce about our best days and milestones of the prior year (for 2023, it was a huge celebration with our best friends for my wife’s birthday, an epic bike ride with our kids...more
As bankruptcy attorneys who often defend clients in preference avoidance actions, we were pleased with the 547(b) amendments, effective as of February 20, 2020, requiring a trustee to conduct some level of due diligence into...more
There is longstanding controversy concerning the validity of third-party release provisions in non-asbestos trust chapter 11 plans that limit the potential exposure of various nondebtor parties involved in the process of...more
The Bankruptcy Code and its predecessor statutes have long permitted bankruptcy trustees (or their equivalents) to claw back preferences, which involve transfers made on preexisting debts within 90 days (or 1 year, if made to...more
Section 363(m) of the Bankruptcy Code provides that the reversal or modification of an order approving a sale or lease of assets in bankruptcy does not affect the validity of the sale or lease to a good-faith purchaser or...more
This will continue our series on bankruptcy schedules. In a prior blog post, we looked at Schedule A/B. Today, our focus will be on Schedule C related to the claiming of exemptions. ...more
This will be the first in a series of blog posts that will focus on completing bankruptcy schedules. We’ll start in this blog with the first schedule – Schedule A/B. ...more
This entry is part of Nelson Mullins’s ongoing “Bankruptcy Basics” blog series that is intended to address foundational aspects of bankruptcy for new and non-bankruptcy practitioners and professionals. This entry will discuss...more
With the recent uptick in Chapter 11 filings and a further increase expected in the coming quarters, companies across all industries would be wise to consider certain precautionary measures if a customer begins missing or...more
There is seemingly, in the opinion of a great number of bankruptcy courts, a conflict between the United States Bankruptcy Code requirements that a debtor reorganize or liquidate “in good faith,” the federal Controlled...more
This presentation is prepared for in-house counsel and other attorneys practicing outside of the bankruptcy space and will address the following questions that often arise when dealing with a party that later goes into...more
Preference defense received an important boost this week when the Eleventh Circuit decided that invoices paid under 11 U.S.C. § 503(b)(9) can count as "new value" in defending against preference claims. It is the first...more
The U.S. Bankruptcy Code allows a trustee or debtor-in-possession to claw back certain payments or transfers made to a creditor during the 90 days prior to the petition date, based on the principle that such payments unfairly...more
Faulkner v. Broadway Festivals, Inc. The recent bankruptcy case for Northern District of Texas, Faulkner v. Broadway Festivals, Inc., Adv. Proc. 20-05031 (Bankr. N.D. – Tex., January 11, 2022), addresses preferential...more
Background - During a winding up, the statutory duty of a liquidator is to gather in the estate of the company, which includes recovering any amounts owing to the company. Creditors then submit proofs of debt and receive...more
Holland & Knight invites you to read our China Practice Newsletter, in which our authors discuss pertinent Sino-American topics - HIGHLIGHTS: Preference Claims Clawbacks in Bankruptcy Can Disrupt a Construction...more
Because of the injunction that begins as soon as a debtor files for Chapters 7, 11 or 13 bankruptcy – called the automatic stay – creditors and collection agencies are prevented from seeking payment from the debtor....more
Industry News - Purdue Pharma Says Its Bankruptcy Deal Is Fairest to Creditors... Student Loans and Bankruptcy: What to Know...more
Bankruptcy preference claims are viewed by businesses as an unfair legal tool that debtors and trustees use to take money back, even though the pre-bankruptcy payments from the debtor were for legitimate business debts. By...more