Creditors Chapter 11

News & Analysis as of

New Delaware Chapter 11 Filing – Millennium Lab Holdings II, LLC

Millennium Lab Holdings II, LLC and two of its affiliates, Millennium Health, LLC, and RxAnte, LLC, have commenced cases (Lead Case No. 15-12284) under Chapter 11 of the Bankruptcy Code by filing petitions with the United...more

New Delaware Chapter 11 Filing – Fresh & Easy, LLC

Fresh & Easy, LLC has filed a chapter 11 petition in the United States Bankruptcy Court for the District of Delaware (Case # Case No: 15-12220-CSS). The Petition and list of top 30 creditors and the docket are available...more

Third Circuit Affirms Bad Faith Involuntary Bankruptcy Dismissal, Increasing Risk of Punitive Damages

Last week’s decision by the U. S. Court of Appeals for the Third Circuit in In re: Forever Green Athletic Fields, Inc., No. 14-3906 (3d Cir. Oct. 16, 2015) held that an involuntary bankruptcy petition filed under 11 U.S.C. §...more

Global Private Equity Newsletter - Fall 2015 Edition: Recent Developments in Acquisition Finance

When a portfolio company underperforms, a sponsor may consider various options to address the perceived performance issues, including changes to a portfolio company’s management team, cost structure, capital structure or...more

United States District Court for the Southern District of New York Largely Dismisses Lehman’s $8.6 Billion “Slush Fund” Claims...

On September 30, 2015, the United States District Court for the Southern District of New York (the “District Court”) denied the motion of Lehman Brothers Holdings Inc. (“LBHI,” and collectively with all of LBHI’s...more

Equitable Liens: No Mortgage Does Not Necessarily Mean No Lien

Marcum v. Marcum (In re Marcum), 508 B.R. 499 (Bankr. M.D. Fla. 2014) – A creditor made two prepetition loans to a chapter 13 debtor for payment of delinquent real estate taxes. The loans were supposed to be secured by...more

Secured Creditors in Section 363 Sales Be Aware -Your Proceeds May Be Used to Satisfy the Debtor’s Unpaid State Tax Liabilities

It is a basic feature of sales under section 363 of the U.S. Bankruptcy Code, that the purchaser takes free and clear of all claims and interests, such claims and interests attach to the proceeds of the sale in accordance...more

Treatment of senior unsecured debt in European leveraged finance transactions: the need for an intercreditor agreement

Over the last few years, the European leveraged finance market has seen rapid growth of senior secured high yield notes (“SSN”) and senior secured covenant-lite term loan B (“TLB”) financings. A common feature of both SSNs...more

New Administrative Orders Amend Procedures for Creditors in Consumer Bankruptcy Cases Pending in the Middle District of Florida

Prior to September 1, 2015, procedures in consumer chapter 13 bankruptcy cases varied greatly across the divisions of the Middle District of Florida, creating vastly different workflows for creditors and attorneys with cases...more

Energy Future Holdings – Another Major Success for Chapter 11 Mediation?

Mediation has become an invaluable tool in large chapter 11 cases. Traditionally viewed as a means for resolving discrete disputes between a debtor’s estate and an adversary party, in recent years mediation in certain complex...more

Ninth Circuit Holds that Absolute Waiver of Subrogation Rights Insulates Insider-Guarantor from Preference Exposure

In Stahl v. Simon (In re Adamson Apparel, Inc.), 785 F.3d 1285 (9th Cir. 2015), the United States Court of Appeals for the Ninth Circuit considered an unresolved issue of bankruptcy law: whether a corporate insider who...more

Sands Anderson Report on Creditors Committee formation in Alpha Natural Resources Chapter 11

An Official Committee of Unsecured Creditors (“the Committee”) was appointed on Wednesday, August 12, 2015 in the Chapter 11 case of Alpha Natural Resources, Inc. (“ANR“). ANR’s bankruptcy case was filed on August 3, 2015 in...more

Our customer has filed bankruptcy but demands that we continue to extend trade credit! Are we obligated to do so?

Trade creditors often face the issue of whether they are required to continue providing goods or services on credit to a customer that has filed chapter 11 bankruptcy. Unfortunately, the Bankruptcy Code fails to specifically...more

Spotlight on Brazil: Recuperação Judicial vs. Chapter 11

The bankruptcy proceedings of Brazilian oil companies OGX and OSX have all the makings of a financial soap opera: one high-profile billionaire filing for bankruptcy on behalf of two related enterprises with a combined...more

The ABI Commission on Business Bankruptcy Reform: The Sale of All or Substantially All of the Debtor's Assets and Proposed...

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

Sands Anderson Report on First Day Hearing in Bankruptcy Filings of Alpha Natural Resources

Lawyers from the bankruptcy team of Sands Anderson attended “first day” hearings in the Chapter 11 bankruptcy case of Alpha Natural Resources, Inc. (“Alpha”) and its 149 related companies held on August 4, 2015 in the United...more

Officer/Director Breach of Duty: If Things Get Bad Enough, There May Be Recourse

Official Comm. of Unsecured Creditors v. Baldwin (In re Lemington Home for the Aged), 777 F.3d 620 (3rd Cir. 2015) – The debtor was a nonprofit corporation that operated a nursing home. The chapter 11 unsecured...more

Delaware Bankruptcy Court Allows Debtor to Sidestep “Make-Whole” Payment

Bankruptcy Judge Christopher S. Sontchi recently ruled in the Energy Future Holdings case that the debtor will not be required to pay the $431 million “make whole” demanded by bondholders upon the debtor’s early payment of...more

“Never Say Never”: Lessons From RadioShack’s Sale of Customer Information

When a bankrupt company’s most valuable assets include consumer information, a tension arises between bankruptcy policy aimed at maximizing asset value, on the one hand, and privacy laws designed to protect consumers’...more

Energy Future Holdings – More Bad News for Bondholders on Make-Whole Premiums

Make-whole premiums are often used in connection with the issuance of debt in order to protect noteholders with long term investment horizons from being repaid early. At the time of the bankruptcy filing of EFH in April 2014,...more

Rare-Earth Producer Molycorp. and North American Subsidiaries File Chapter 11

Before the petition date, creditors holding more than 70 percent of the debtors' senior debt agreed to provide $225 million in financing, subject to Court approval. A proposed restructuring support agreement plans to...more

The ABI Commission on Business Bankruptcy Reform: Providing Information and Fairness to Creditors

Will Congress Finally Act? This is the fourth in a series of Alerts regarding the proposals made by the American Bankruptcy Institute Commission to Reform Chapter 11 Business Bankruptcies. We discuss here the Commission’s...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

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

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