News & Analysis as of

Debtors

Section 553 of the Bankruptcy Code Preserves Rather Than Creates Setoff Rights

by Jones Day on

In Feltman v. Noor Staffing Grp., LLC (In re Corp. Res. Servs. Inc.), 564 B.R. 196 (Bankr. S.D.N.Y. 2017), the bankruptcy court considered whether section 553 of the Bankruptcy Code creates a right of setoff when no such...more

Second Circuit Affirms Bankruptcy Court’s Nullification of Chapter 15 Debtor’s Sale of Claim Due to Woefully Inadequate Price

by Jones Day on

In the March/April 2013 edition of the Business Restructuring Review, we reported on an opinion by the U.S. Bankruptcy Court for the Southern District of New York concluding that a chapter 15 debtor’s sale of claims against...more

Two Recent Decisions Demonstrate Continued Disagreement Over Whether Economic Value or Face Amount of Liens Is Appropriate Metric...

by Jones Day on

The ability of a trustee or chapter 11 debtor in possession ("DIP") to sell bankruptcy estate assets "free and clear" of liens on the property under section 363(f) of the Bankruptcy Code has long been recognized as one of the...more

Recent Case Law Developments Impact Claims of Unpaid Suppliers for Goods Delivered Immediately Prior to Customer Bankruptcy

by Dickinson Wright on

Section 503(b)(9) of the Bankruptcy Code (11 U.S.C. §503(b)(9)) provides a special administrative priority claim for someone that supplies goods to a debtor in the 20 day period before the bankruptcy filing, but is unpaid as...more

Partial Worthlessness

by Alston & Bird on

While we wait to learn whether the Section 385 regulations will be withdrawn or changed, it is useful to recall some of the basic rules of dealing with debt. Even related-party debt can sometimes run into payment troubles....more

Suppliers Beware: Two Recent Cases (in Third Circuit and Delaware) Hold that Debtor Must Physically Possess Goods Within Statutory...

Amidst a surge in retail bankruptcies, two recent decisions construing section 503(b)(9) of the Bankruptcy Code directly limit suppliers’ ability to seek administrative claims for goods shipped to a debtor in the period...more

Success Fees - Technical Arguments Fail In The Face Of Broad Definitions

by Fox Rothschild LLP on

In a decision signed July 26, 2017 in the Nephrogenex bankruptcy (case 16-11074), Judge Gross of the Delaware Bankruptcy Court approved of the application of the Debtor’s investment banker for a success fee over the objection...more

Delaware Clarifies “Received” For Valuable 503(b)(9) Claims

by Cole Schotz on

Delaware’s Bankruptcy Court has recently issued two insightful opinions that impact a creditor’s ability to establish the “receipt” element of a valuable 503(b)(9) administrative expense priority claim. CASE 1: In re SRC...more

Delaware Court Denies Request of Beverly Hills Entities to Require Chapter 11 Debtor to Properly Abandon Wells

by Clark Hill PLC on

In In re Venoco, LLC, 2017 WL 2374683 (May 31, 2017), the Delaware bankruptcy court denied the request of California governmental agencies to require the Debtor to comply with environmental obligations with regard to an oil...more

Third Circuit Decides Goods Are “Received” Upon Physical Possession in Bankruptcy Case

by Perkins Coie on

Many creditors that provide goods to a debtor before a bankruptcy case begins believe that their recovery will be mere cents on the dollar. While prepetition claims often receive small, if any, distributions, Section...more

Charging Orders

A “charging order” allows a judgment creditor to receive a debtor’s share of distributions from a limited liability company (LLC) or a partnership. With the proliferation of LLCs in the last 20 years, understanding “charging...more

Restructuring and Insolvency Bulletin - Issue 1 - 2017 - Supreme Court Lehman Waterfall I decision - foreign currency creditors...

by Dechert LLP on

98% of the liabilities of Lehman Brothers International (Europe) (in administration) (“LBIE”) were denominated in non-sterling currencies. The fall in sterling after LBIE entered administration resulted in significant paper...more

Third Circuit Provides Guidance To Creditors Seeking Section 503(b)(9) Administrative Expense Status

by McCarter & English, LLP on

Unsecured creditors frequently find themselves in the lurch when a company files for bankruptcy. One of the few mechanisms for recovering the value of goods supplied to a debtor prior to a bankruptcy case is an administrative...more

Derivative Complaints By Creditors Against Chapter 7 Trustees – They Don’t Tend To Go Very Far

by Fox Rothschild LLP on

In a decision signed July 17, 2017 in the Our Alchemy, LLC bankruptcy (case 16-11596), Judge Gross of the Delaware Bankruptcy Court granted a trustee’s partial motion to dismiss a complaint, holding that a creditor cannot...more

Recent Bankruptcy Decision from the Western District of Wisconsin Discusses Negative Equity, Car Loans, and the Chapter 13 Cram...

by Ruder Ware on

A quick introduction for those of you who are not bankruptcy nerds. For certain types of collateral, Chapter 13 allows a Debtor to reduce a secured creditor’s claim down to the value of the collateral. This is called “cram...more

When “The Check Is In The Mail” Extinguishes A Debtor’s Obligation

by Allen Matkins on

Most creditors likely assume that they have not been paid unless and until they receive checks from their debtors. In many cases that assumption may be correct, but in some cases it won’t be. Section 1476 of the California...more

Courts, Cooperation, and More: A Review of Cross-Border Insolvency Protocols

by Jones Day on

In cross-border restructuring cases, including cases under chapter 15 of the U.S. Bankruptcy Code and versions of the UNCITRAL Model Law on Cross-Border Insolvency enacted in 42 other nations or territories, interested...more

Double Trouble—Is Black Sky Capital Blue Skies for Lenders?

by Perkins Coie on

An annoying question for lenders is whether or not a lender can enforce two loans to the same borrower and secured by the same property. The nagging issue is usually raised when a lender makes (1) a first loan and an...more

Review of amendments to the insolvency legislation

by White & Case LLP on

This review concerns a number of amendments to Federal Law “On insolvency”1 (the “Law”) introduced by federal laws No. 222-FZ2 and No. 488-FZ3, and the interpretation of the amendments in the Review of Court Practice on...more

Section 503(b)(9) Claims – What Does “Receipt” Really Mean?

by Cole Schotz on

In an era when goods or materials often originate from suppliers or manufacturers outside the United States, bankruptcy courts are grappling with when “receipt” of goods occurs for the purpose of 503(b)(9) claims. While...more

F-Squared Investment Management - Avoidance Actions Filed

by Fox Rothschild LLP on

On July 6-7, 2017, Craig Jalbert, in his capacity as Trustee for F2 Liquidating Trust, filed approximately 187 complaints seeking the avoidance and recovery of allegedly preferential and/or fraudulent transfers under Sections...more

Can Forcing A Company Into Bankruptcy Be An Unfair Or Deceptive Trade Practice? Part 2

by Ellis & Winters LLP on

In a recent post, we examined the bankruptcy case of In re American Ambulette & Ambulette Service, Inc.—a case in which a trustee raised a novel theory of liability under N.C. Gen. Stat. § 75-1.1. The bankruptcy trustee...more

Exculpatory Provisions Under Delaware Law: Say What You Mean And Mean What You Say

Exculpation provisions in operating agreements must be carefully crafted in order to protect members, managers, directors and officers for breaches of fiduciary duties...more

Commercial Tenant Debtors in Chapter 11: Fundamentals of Landlord Creditor Protection in Bankruptcy

by BakerHostetler on

Commercial landlords have unique protections in bankruptcy, but can lose these rights if they do not assert them. When a commercial tenant files bankruptcy under Chapter 11, the landlord must carefully monitor filings and...more

June 2017: Courts May Not Depart from the Bankruptcy Priority Rule in Chapter 11 Structured Dismissals

For more than a century, a cornerstone of federal bankruptcy law has been the absolute priority rule, which ensures that a debtor estate’s assets are distributed to senior and special classes of creditors over junior...more

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