News & Analysis as of

Motion to Dismiss Chapter 11

DLA Piper

Delaware District Court Sheds Light on Standards for Dismissal of Chapter 11 Case Based on Bad Faith

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On August 28, 2024, Judge Gregory B. Williams of the US District Court for the District of Delaware issued a ruling in AIG Financial Products Corporation, Civ. No. 23-573, affirming an order on appeal from the Delaware...more

Proskauer Rose LLP

Staying Afloat in an Uncertain Economic World: Hope for the Best, Prepare for the Worst Private Credit Restructuring Year in...

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While global inflation and higher-for-longer interest rates dominated macroeconomic headlines over the last year, middle-market private credit restructurings witnessed three notable trends.  First, these credits remained...more

Holland & Hart LLP

Why Bankruptcy Is A Budding Alternative For Cannabis Cos.

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Bankruptcy can be a remarkable tool for rehabilitating a struggling business, preserving jobs and going-concern value, and liquidating the assets of an insolvent company. The drafters of this country's bankruptcy laws...more

Maron Marvel

3rd Circuit Rejects Johnson & Johnson’s Effort To Set Up Subsidiary In Bankruptcy Court To Resolve Talc Asbestos Claims

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On January 30, 2023, the Third Circuit dismissed Johnson & Johnson (J&J)’s subsidiary LTL’s Chapter 11 bankruptcy petition because the facts did not support the financial distress required for the entity’s good faith filing...more

Proskauer Rose LLP

Liability Management – Vaccine or Pandemic? Private Credit Restructuring Year in Review

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Once again, we reflect on the prior year for restructuring trends impacting private credit lenders. Last year it was all about “liability management”—the latest trend in which the limits of sponsor-favorable loan documents...more

Nelson Mullins Riley & Scarborough LLP

The Not-So-Automatic Stay for Foreign Assets and Creditors

When a debtor files for bankruptcy, it’s axiomatic that all creditors, wherever located, must immediately cease their efforts to collect on debts owed to them by that debtor, right? Not necessarily so, says the United States...more

Harris Beach PLLC

Cannabis-Related Companies Can’t File Bankruptcy Until Federal Legalization

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Although the use of cannabis has been legalized in approximately 39 states and the District of Columbia¹ , cannabis is still illegal federally and classified as a Schedule I drug under the Controlled Substances Act. As a...more

Nelson Mullins Riley & Scarborough LLP

Crossing the “The”: The Importance of Careful Drafting for Recorded Mortgages

In Enter. Bank v. The Ingros Fam. LLC, et al., 2022 WL 2283392 (Bankr. W.D. Pa. June 23, 2022), a lender faced a potentially costly decision when it mistakenly left the word “The” from a borrower’s name. In Ingros, First...more

Arnall Golden Gregory LLP

Delaware Bankruptcy Court Decision Highlights Potential Defenses to Equitable Subordination Claim

On March 25, 2022, the United States Bankruptcy Court for the District of Delaware dismissed a complaint filed against a lender and other entities. An individual (and others) formerly in control of the bankrupt companies sued...more

Dechert LLP

Texas Two Step is Alive and Well

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The Bankruptcy Court for the District of New Jersey denied motions to dismiss the chapter 11 case of the newly created subsidiary of Johnson & Johnson, LTL Management LLC, and granted the debtor’s motion to stay prosecution...more

Cadwalader, Wickersham & Taft LLP

Delaware Bankruptcy Court Rules that Unsecured Creditors of a Solvent Debtor Are Entitled to Post-Petition Interest at the Federal...

On December 22, 2021, Judge Mary Walrath of the Bankruptcy Court for the District of Delaware held in In re The Hertz Corp. that redemption premiums may potentially qualify as unmatured interest, and that, to the extent that...more

Vinson & Elkins LLP

In re Pace Industries, LLC: Minority Shareholder With Bankruptcy Consent Rights Considered Controlling Minority Shareholder With...

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A recent bench ruling in In re Pace Industries, LLC1 by Judge Walrath for the Bankruptcy Court for the District of Delaware (the “Court”) has validated a chapter 11 bankruptcy filing by certain debtors in the jointly...more

Kramer Levin Naftalis & Frankel LLP

"Time Is On My Side" — When a "Time of the Essence" Closing Date Keeps Rolling Like a Stone for 60 Days

The recent decision of the Bankruptcy Court for the Southern District of New York in In re AAGS Holdings LLC, Case No. 19-13029 (SMB) (Bankr. D. Del. Nov. 12, 2019), underscores the ability of debtors — and specifically, for...more

Cadwalader, Wickersham & Taft LLP

No, You’re a Customer: Recent Second Circuit Decision Circumscribes Merit and Preempts State Law Impairment of Safe Harbor...

On December 19, 2019, the United States Court of Appeals for the Second Circuit (the “Second Circuit”) affirmed a ruling of the United States District Court for the Southern District of New York (the “District Court”)...more

Snell & Wilmer

Is a Bankruptcy Plan that Violates Federal Criminal Law Proposed in Bad Faith?

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Although legal in many states, marijuana remains illegal under federal criminal law. See 21 U.S.C. § 856(a)(1). One would think that engaging in illegal activity under federal criminal law would preclude relief under federal...more

Dechert LLP

U.S. Court Not Bound by Korean Law Conferring Exclusive Jurisdiction in Shareholder’s Derivative Actions

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Shareholder of a Korean corporation (“Cuzco Korea”), the sole member of a chapter 11 limited liability company debtor (“Cuzco USA” or the “Debtor”), brought an adversary proceeding against the Debtor and others, asserting...more

Dechert LLP

Restructuring and Insolvency Bulletin: Issue 4 - May 2018: If You Don’t Succeed in Anguilla, Should You Try Again in the US?

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Two United States Bankruptcy Judges for the Southern District of New York recently issued a joint opinion addressing common issues raised by motions to dismiss in two separate adversary proceedings – one pending before Judge...more

Foley & Lardner LLP

Franchisor Bankruptcy Case Dismissed as a Bad Faith Filing

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The United States Bankruptcy Court for the District of Delaware recently issued an opinion discussing the tension between using bankruptcy as a legitimate tool to maximize value versus using bankruptcy merely as a litigation...more

Patterson Belknap Webb & Tyler LLP

Bankruptcy Remoteness Going to a Court of Appeals

Back in the day--say, the last two decades of the twentieth century--we bankruptcy lawyers took it largely on faith that the right structural and contractual provisions purporting to confer bankruptcy-remoteness were...more

Kramer Levin Naftalis & Frankel LLP

“Golden Share” Equity Holder Can Bar Bankruptcy Filing

The Bankruptcy Court in the Southern District of Mississippi (the “Court”), in In re Franchise Services of North America, Inc., Case No. 1702316EE (Bankr. S.D. Miss. Dec. 18, 2017), upheld the blocking power held by a...more

Orrick, Herrington & Sutcliffe LLP

Second Circuit Rejects Categorical Dismissal Of Market Rates When Determining Cram-Down Interest Rates In Chapter 11

On October 20, 2017, the Second Circuit issued its long awaited ruling on several appeals from a U.S. District Court (Bricetti, J.) determination affirming the United States Bankruptcy Court (Drain, J.) in the MPM Silicones,...more

Burr & Forman

Court Denies Creditor’s Motion to Dismiss Chapter 11 Case Despite Multiple Factors in Favor of Dismissal

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In a recent case out of the bankruptcy court for the Southern District of Florida (the “Court”), a secured creditor moved to dismiss a debtor’s bankruptcy case “for cause” based on the debtor’s bad faith filing. The debtor...more

Holland & Knight LLP

Courts Continue Trend of Recognizing Tribal Immunity in Bankruptcy Proceedings

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Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware (Court) issued a decision on Feb. 28, 2017, that has important – and positive – significance for Native American tribal governments, their...more

Robins Kaplan LLP

Case Dismissed! Do Not Pass Go, Do Not Collect Your $1 Million

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Following dismissal of a bankruptcy case, what is the bankruptcy court’s authority to enforce an award for attorneys’ fees? While you might think that the bankruptcy court retains authority to enforce its own orders, a recent...more

Robins Kaplan LLP

“Any and All” Doesn’t Preserve Any and All Estate Claims Post-Confirmation

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The Bankruptcy Code permits Chapter 11 plans to provide for the reservation of any claims or interests that that belong to the debtor or the estate, allowing the plans to be confirmed prior to the final resolution of any and...more

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