Commercial Bankruptcy

News & Analysis as of

A WARN Act Roundup: Jury Trial Rights, the Unforeseen Business Circumstances Defense, and the Single Employer Rule

Towards the end of 2014, three federal courts explored developing issues under the federal Worker Adjustment and Retraining Notification Act of 1988 (WARN Act), 29 U.S.C. §§ 2101-2109 et. seq. Below is a summary of three...more

Overview and Analysis of Select Provisions of the ABI Chapter 11 Reform Commission Final Report and Recommendations - Part Two of...

Last month, Orrick’s Restructuring team began a three-part look at the American Bankruptcy Institute’s Chapter 11 Reform Report. In part one we looked at issues related to confirmation, valuation, financing and asset sales....more

Sale Orders: Ignore at Your Peril, Even After the Bankruptcy Case is Closed

Bombart v. The Family Center at Sunrise, LLC, 520 B.R. 300 (S.D. Fla. 2014) – The owner of assets purchased in a bankruptcy sale sought to reopen a closed bankruptcy case to obtain an order enjoining the owner of the...more

ProNerve Holdings, LLC, A Colorado Based Provider of Intraoperative Neurophysiologic Monitoring (IOM) Files for Chapter 11...

On February 24, 2015, ProNerve Holdings, LLC and 8 affiliated companies filed voluntary chapter 11 petitions in Delaware. The case is docketed at 15-10373, and has been assigned to The Honorable Kevin J. Carey....more

Bankruptcy Beat: Payments Made Directly From A DIP Account More Likely To Be “Unauthorized” Post-Petition Transfers

On December 19, 2014, The Honorable Julie A. Manning issued a Memorandum and Decision in the In re Louis Gherlone Excavating, Inc. case with respect to a Complaint filed by the Chapter 7 Trustee, Richard M. Coan (“the Trustee...more

Trump Taj Mahal Fined Record $10 Million for Inadequate AML Program

As disclosed recently in a bankruptcy court filing, on January 27, 2015, the Financial Crimes Enforcement Network (“FinCEN”) imposed a $10 million civil money penalty pursuant to the Bank Secrecy Act (the “BSA”) on Trump Taj...more

The Not-So-Remote Possibility of the Bankruptcy of a Bankruptcy Remote Entity

A bankruptcy remote entity is a special-purpose vehicle (or special purpose entity) (“SPV”) that is formed to hold a defined group of assets and to protect them from being administered as property of a bankruptcy estate. See...more

Firm Wins Victory for BMO Harris at Minnesota Supreme Court

Stinson Leonard Street attorney Keith Moheban led a team of attorneys that won an important decision for firm client BMO Harris Bank at the Minnesota Supreme Court Feb. 18, 2015. Construing Minnesota’s Uniform Fraudulent...more

Business Restructuring & Insolvency Year in Review

Excerpt from A Year in Review: We are pleased to say that 2014 was another successful year for Morrison & Foerster’s Business Restructuring & Insolvency Group. Despite continuing market headwinds, the last year brought...more

Allen Systems Group, Inc. and Certain Affiliates File a Prepackaged Chapter 11 Case

On February 18, 2015, Allen Systems Group, Inc., ASG Federal Inc. and Viasoft International, LLC all filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. The cases are docketed at...more

Recent Developments in Acquisition Finance

Recent legal and regulatory developments have raised issues for those considering a loan-to-own acquisition strategy, and have continued to impact both the structure of highly leveraged financings and the makeup of those...more

Court Compels Discovery Of Reinsurance And Other Insurance Documentation From Insurer In Garnishment Proceedings

The judgment was entered in a class action by plaintiffs who lost their tuition payments for computer training programs at schools that abruptly closed in 2009. In attempting to collect on the judgment, plaintiffs served...more

Florida Bankruptcy Court Offers Potential Means to Stave Off Medicare Termination

A recent bankruptcy decision in Florida may have implications for troubled healthcare entities that seek to avoid Medicare termination and preserve reimbursements. ...more

Do You Know What is in Your Buyer’s Wallet?

In a recent ruling, the Ninth Circuit held that a seller was liable under the law of fraudulent conveyance to the bankruptcy trustee for the portion of the purchase price funded by a company controlled by the buyer, which was...more

Saladworks, LLC files Chapter 11 in Delaware

On February 17, 2015, Saladworks, LLC filed a chapter 11 bankruptcy case in Delaware. The case has been docketed as case no. 15-10327 and has been assigned to The Honorable Laurie Selber Silverstein....more

UCC Lien Termination Error May Result In Huge Loss For Lender

The legal principles governing corporate finance are often complex. Sometimes, however, the simplest of errors can be the most costly. Such was the case with a large syndicated secured loan made to General Motors. Due to a...more

Losing At Dodge Ball: Understanding The Supreme Court’s Implied Authorization Of Consent In Executive Benefits Insurance Agency V....

In this Article: - Introduction - A Tale as Old as Time: The Evolution of Bankruptcy Jurisdiction Before Stern - Let’s Talk About Stern, Baby - Much Ado About Nothing: Executive Benefits Insurance...more

ResCap Liquidating Trust Repurchase Lawsuit Survives Motion to Dismiss in Part:

On February 3, Judge Martin Glenn of the United States Bankruptcy Court of the Southern District of New York denied defendants’ motions to dismiss four adversary proceedings brought by the liquidating trust for Residential...more

Banking & Financial Service E-Note - January 2015

In this issue: - Denial of Plan Confirmation & Finality - Supreme Court's Resolution of Circuit Split May Apply to Chapter 11 - Third DCA Issues Opinion Defining When and How Acceleration Occurs and Addressing...more

Attorney Fees: Following Local Law Can Mean the Difference Between Collecting or Not

Southside, LLC v SunTrust Bank (In re Southside, LLC), 520 B.R. 914 (Bankr. N.D. Ga. 2014) – A debtor objected to attorney fees included in the proof of claim filed by a mortgagee, and the mortgagee moved for relief...more

U.S. District Court of Delaware Reverses and Remands A Bankruptcy Settlement Effected With No Notice

On January 16, 2015, Chief Judge Leonard P. Stark of the United States District Court for the District of Delaware issued an opinion that reversed an order of the Delaware Bankruptcy Court that approved a settlement, and...more

Altegrity, Inc., Global Provider of Risk Solutions, Files Chapter 11

Altegrity, Inc., who bills itself on its website as “The world’s leading brands in risk solutions, security, ediscovery, data recovery and employment screening,” filed for chapter 11 protection in Delaware on February 8,...more

IRS Will Not Follow Partner COD Bankruptcy Exception Cases

In a new Action on Decision (AOD 2015-10), the IRS stated that it will not follow the Tax Court’s 2004 Martinez decision, which had allowed a general partner to exclude cancellation of debt (COD) income from a partnership in...more

Women’s Clothing Retailer, Cache Inc., Seeks Protection Inside Chapter 11

On February 4, 2015, women’s clothing retailer, Cache Inc., filed a chapter 11 bankruptcy case in Delaware. The petition lists the top 30 unsecured creditors. Two of the largest creditors are landlords Simon Property Group...more

Blog: The Ninth Circuit Rejects the “Dominion and Control Test” for Determining the Initial Transferee in Fraudulent Conveyance...

Under section 550(a) of the Bankruptcy Code, a trustee or debtor in possession may recover property (or its value) that has been fraudulently transferred “from the initial transferee or the entity for whose benefit the...more

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