Chapter 11

News & Analysis as of

UK Court Decision Demonstrates Importance of Compliance With ISDA Market Quotation Procedures

The High Court of England and Wales (Commercial Court) recently decided in favor of Lehman Brothers Finance S.A. (in liquidation) (LBF) against Sal. Oppenheim Jr. & Cie. KGAA (Oppenheim). The matter involved a dispute over...more

Credit Bid (Round 2): What Does It Take to Show “Cause”?

In re Charles Street African Methodist Episcopal Church of Boston, 510 B.R. 453 (Bankr. D. Mass. 2014) – In connection with a proposed sale of real property, a chapter 11 debtor sought to prohibit the mortgagee from...more

The Fifth Circuit Narrowly Construes "Good Faith" In The Context Of Lending To A Debtor

Debtor-in-possession financing ("DIP financing") is a critical issue that comes up at the beginning of most large to mid-sized bankruptcy cases. Companies filing bankruptcy are typically doomed to a rapid liquidation if they...more

Bankruptcy sales for distressed hospitals: 4 questions to ask before you begin

Over the last several years, a wide range of healthcare companies, among them hospitals, home health agencies and continuing care facilities, have faced financial distress as a result of declining revenues, high operating...more

Abandonment: When Property Drops Out of the Bankruptcy Estate

In re Rich, 510 B.R. 366 (Bankr. D. Utah 2014) – In a case that was converted from a chapter 11 reorganization to a chapter 7 liquidation, the debtor sought an order directing the trustee to abandon certain real...more

Catching Judge Sontchi’s “Flurry of Opinions” PARTS 2-3 OF 3

In This Issue: - In re: Energy Future Holdings Corp., et al, 14-10979 (CSS) (CSC Trust Company of Delaware, as Indenture Trustee, v. Energy Future Intermediate Holdings Company LLC and EFIH Finance, Inc., Adv. Pro No:...more

Is there a Serious Threat to a Secured Creditor's Right to Credit Bid at Bankruptcy Sales, or Is the Impact of Recent Cases...

The right to credit bid is one of the most important protections afforded a secured creditor. Recognized under both state and bankruptcy law, the right to credit bid safeguards against undervaluation at an asset sale, whether...more

High Yield Debt

It is no surprise to anyone involved in the restructuring community that bankruptcy filings continue to decline. As reported by the American Bankruptcy Institute, corporate chapter 11 filings have decreased 34 percent since...more

Bankruptcy Court Holds That Secured Creditors Can Be “Crammed Down” With Below-Market Rate Replacement Notes

On August 26, 2014, in the case In re MPM Silicones, LLC, Case No. 14-22503 (Bankr. S.D.N.Y.) (“Momentive”), the United States Bankruptcy Court for the Southern District of New York held that secured creditors could be...more

Fraudulent Transfer: A Case Where Strong Arm Powers Were “An Inch Too Short”

A Chapter 11 trustee sought to avoid a transfer of property under Section 544 of the Bankruptcy Code that occurred after (1) the bankruptcy petition was filed and (2) a chapter 11 plan of reorganization was confirmed. ...more

Second Circuit's Significant Decision Could Impact Liquidating Trustees

In the case of United States of America v. Edward P. Bond, No. 12-4803 (2d. Cir. August 13, 2014), the United States Court of Appeals for the Second Circuit (the "Second Circuit") issued a decision that could have...more

Philadelphia Entertainment and Development Partners LP Wins Chapter 11 Plan Approval

U.S. Bankruptcy Judge Madeline Coleman approved a modified Chapter 11 Bankruptcy Plan for Philadelphia Entertainment and Development Partners, L.P (“Philadelphia Entertainment”) on Monday, July 28, 2014. ...more

The “B” Word – Asserting Your Claim in the Wake of a Bankruptcy Filing: Proof of Claim Basics

The word “bankruptcy” often strikes dread in the hearts of creditors. To some, when they hear that someone who owes them money has filed bankruptcy, they envision writing off the debt and never receiving a cent. However,...more

Why Chapter 11 Bankruptcy is the Only Bankruptcy Option for Some Individuals

While Chapter 11 is mainly a form of bankruptcy for business entities, individuals also have the option of filing a Chapter 11 bankruptcy petition. Since Congress enacted the Bankruptcy Abuse Prevention and Consumer...more

Bankruptcy Sales and Leases: “Free And Clear” May Not Be So “Free And Clear”

In approving the sale of a Chapter 11 debtor’s assets, a bankruptcy court found that a tenant of the debtor was entitled to continue in possession of the leased portion of the sold property for the remainder of its lease. ...more

Genco Shipping Valuation Leaves Equity Interests Under Water

A chapter 11 plan can only be confirmed if it does not discriminate unfairly and is “fair and equitable” to any non-accepting impaired class. In this case, the issue was whether the debtor’s projected “reorganization value”...more

Environmental Claims: Twenty Years Later

A Chapter 11 debtor moved to reopen its bankruptcy case more than 15 years after it was closed in order to enforce the plan confirmation order to prevent claims by a state environmental agency and other potentially...more

Some Days, A Stay Is Easier to Obtain Than Others

In A&F Enterprises v. IHOP Franchising LLC, 742 F.3d 764 (Seventh Cir. 2014), Chapter 11 debtors appealed a determination that their building leases were deemed rejected because they were not timely assumed. Both the...more

July 2014: Bankruptcy and Restructuring Update

Intellectual Property Licenses in Bankruptcy—Uncertainties Remain Following the Eighth Circuit’s En Banc Decision in Interstate Bakeries. The bankruptcy of a party to an intellectual property license presents serious...more

A Key Customer Filed for Bankruptcy: Should You Keep Doing Business With Them?

When a key customer files bankruptcy, one of the first questions you will face is whether to keep doing business or end the relationship. (Another key question is making sure your pre-bankruptcy claim gets on file or...more

Court Rules That Creditors May Assert Full Amount of Claim Despite Partial Recovery From Third Parties

On June 23, 2014, a federal bankruptcy court in Nebraska issued an order in the chapter 11 bankruptcy cases of Biovance Technologies, Inc. and William Edward Julien that granted American National Bank’s (“ANB”) motion for...more

Federal Practice & Bankruptcy: SCOTUS on Bankruptcy: Jurisdiction and Inherited IRAs Clarified

In a rare burst of bankruptcy enthusiasm, the US Supreme Court in June issued two decisions on matters important to the administration of bankruptcy cases. In re Bellingham, decided June 9, addressed a seemingly...more

Lender Beware: Ensure Plan Releases are Limited to Debtor’s Obligations

A creditor who settles with a debtor during a bankruptcy case must be sure to continue following the case during the plan stage, or risk the plan affecting the creditor’s rights against third parties. Iberiabank learned that...more

Detroit Bankruptcy Update: Sixth Circuit Throws Wrench into Restructuring Timetable

Earlier this month the Sixth Circuit Court of Appeals ruled that the appeal of Syncora Guarantee Inc. must be heard by the lower federal district court before the bankruptcy court may conduct its trial on the city’s proposed...more

North Carolina Court Quashes Chapter 11 Debtor's Blatant Gerrymandering To Achieve Plan Confirmation

In a recent decision welcomed by creditors, the United States District Court for the Eastern District of North Carolina reversed a bankruptcy court order confirming a Chapter 11 debtor’s plan because the debtor engaged in...more

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