Commercial Bankruptcy

News & Analysis as of

A Subsequent Developer has no Ability to Force a Public Body to Call an Abandoning Developer’s Performance Bonds for...

The Arizona Court of Appeals decided on July 22, 2014 that a developer cannot compel a public entity to call its performance bonds to complete infrastructure improvements on a construction project that a prior developer...more

Bankruptcy Auctions Present Opportunities to Acquire Energy Assets with Limited Risk

Energy industry bankruptcies of all types are expected to increase, offering an opportunity for companies to acquire assets for their operating portfolios while taking advantage of the bankruptcy process. We have received...more

Fourth Circuit Issues Reminder to Plan Proponents: Evidentiary Support is Required for Non-Debtor Releases

While a minority of circuits, such as the Ninth Circuit (see, e.g., In re Lowenschuss, 67 F.3d 1394 (9th Cir. 1995), have reasoned that bankruptcy courts lack the authority to approve non-debtor releases based on the language...more

Federal Court Clarifies Requirements of Section 561 of the Corporations Act

In Saker, in the matter of Great Southern Limited [2014] FCA 771 (Saker) the Federal Court considered the question of whether liquidators are trustees of funds said to be held for priority employee creditors, pursuant to...more

The Eighth Circuit Weighs In on Trademark Licenses as Executory Contracts in Bankruptcy Proceedings

Lewis Bros. Bakeries, Inc. v. Interstate Brands Corp. (In re Interstate Bakeries Corp.) - An en banc panel of the U.S. Court of Appeals for the Eighth Circuit reversed an earlier ruling of the same court finding that a...more

PREPA Bondholders Seek Summary Judgment Invalidating Puerto Rico’s Public Corporation Bankruptcy Legislation

On August 11, Franklin Funds and Oppenheimer Rochester Funds filed a second amended complaint, opposition to motion to dismiss and cross-motion for summary judgment in the litigation they previously filed in the United States...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

The Receiver is Thinking of Filing a Bankruptcy Petition for a Corporation in Receivership. As Counsel, if this Happens, are My...

QUESTION: I am counsel to a receiver for a corporation and things aren’t going too well. The receiver is thinking of filing a bankruptcy petition for the corporation. If this happens, are my fees in jeopardy?...more

When Goods Are Shipped from Overseas, When Are They Considered “Received by the Debtor” for Purposes of Asserting a Section...

A bankruptcy court in Pennsylvania recently held that trade creditors who supplied goods to a debtor prior to its bankruptcy filing were not entitled to administrative priority status under Bankruptcy Code section 503(b)(9)...more

Southern District of New York Holds in Madoff That the Bankruptcy Code Cannot Be Used to Recover Extraterritorial Transfers

Dealing a major blow to the trustee’s efforts to recover fraudulent transfers on behalf of the bankruptcy estate of the company run by Bernard Madoff, Judge Jed S. Rakoff of the United States District Court for the Southern...more

Avoid the “Insolvency Exclusion” Trap in E&O Policies: Tennessee Federal Court Confirms That Insolvency Exclusion Does Not Apply...

As the wave of litigation spawned by the 2008 financial crisis begins to ebb, insurance-coverage litigation arising out of the credit crisis continues unabated. Financial institutions have successfully pursued insurance...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

Priority of Payouts in Bankruptcy Filing: Priority, Secured & Unsecured Debts

People often wonder how creditor payment work in bankruptcy filing, in Bakersfield, California. Debt falls into three main categories – priority, secured and unsecured debts....more

SEC Charges Corporate Officers with Fraud Arising from Failure to Disclose Internal Controls Issues and Alleged Misrepresentations...

On July 30, 2014, the Securities and Exchange Commission (“SEC”) advanced a novel theory of fraud against the former CEO (Marc Sherman) and CFO (Edward Cummings) of Quality Services Group, Inc. (“QSGI”), a Florida-based...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

CFPB, State AGs Announce Joint Enforcement Action Against Military Consumer Lender

On July 29, the CFPB and 13 state AGs announced a consent order that requires a consumer lender currently in Chapter 7 bankruptcy to provide $92 million in debt relief for about 17,000 U.S. servicemembers and other consumers...more

Decisions Do Not Apply "Jewel Doctrine" to Departed Partners' Fees - Legal Fees Earned by Departed Partners in Now-Defunct Law...

A California District Court recently held that a bankruptcy trustee could not claim a property interest in the hourly fee matters pending at the now-dissolved Heller Ehrman LLP law firm. This June California decision was...more

Bankruptcy Court Refuses To Dismiss Class Suit Claiming Bank’s Credit Reporting Practices Violated Bankruptcy Code

On July 22, the U.S. Bankruptcy Court for the Southern District of New York rejected a bank’s motion to dismiss a putative class action adversary proceeding alleging that certain of the bank’s credit reporting practices...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

US Supreme Court’s Sleight of Hand in Bankruptcy Jurisdiction

With all attention focused on Executive Benefits, the Daimler decision could represent the real sea change in jurisdiction over non-core actions. Introduction - Recently, much of the bankruptcy bar was focused...more

Doing Business in Canada: Bankruptcy and Insolvency

BANKRUPTCY & INSOLVENCY - In Canada, an “insolvent company” (or “person”) refers to an entity which is not bankrupt and which resides, carries on business or has property in Canada; and which is unable to meet or has...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

Can a Receiver Retake Possession of the Property if a Bankruptcy is Dismissed?

QUESTION: I was appointed receiver for a business. Shortly after my appointment the owners put the business into bankruptcy and I turned over possession to the debtor. I was not discharged as receiver. I just learned that the...more

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