Reorganizations

News & Analysis as of

Fraudulent Transfer: A Case Where Strong Arm Powers Were “An Inch Too Short”

A Chapter 11 trustee sought to avoid a transfer of property under Section 544 of the Bankruptcy Code that occurred after (1) the bankruptcy petition was filed and (2) a chapter 11 plan of reorganization was confirmed. ...more

Business Savvy: North Carolina Has Revamped its Business Court & Corporate Structure Rules

North Carolina continues to be cultivated into increasingly fertile ground in which sophisticated and complex businesses can flourish. Governor McCrory recently signed into law SL2014-102 (SB 853) (the “Act”), an act which...more

‘F’ Reorganization Is Not An Inversion Transaction

The hot tax policy discussion these days is about corporate inversions. Rather than entice capital to stay in the U.S. with favorable tax rates (i.e., using the carrot), it is being proposed to enhance corporate inversion...more

New Structure of Kazakhstan’s Government

On 6 August 2014 the President of the Republic of Kazakhstan issued Decree on reorganization of the Government (the “Decree”). The Decree envisages integration of ministries or certain authorities of theirs into one...more

Significant Legislation Affecting Business Passed by General Assembly

At the end of last week, the North Carolina General Assembly passed significant legislation affecting the State’s business legal climate. With large bipartisan majorities, the Legislature adopted Senate Bill 853 (SB 853),...more

Acquisitive Reorganization Under Section 367(b)

This outline discusses, in plain English, the regulatory provisions called into play under IRC § 367(b) on acquisitive mergers and other non-divisive corporate reorganizations. A Section 367(b) acquisitive reorganization...more

You Got To Show It If You Don’t Want To Blow It

The filing of a bankruptcy petition creates a bankruptcy estate that includes “all legal or equitable interests of the debtor in property as of the commencement of the case.” Highland Capital Mgmt. LP v. Chesapeake Energy...more

The Gateway to Chapter 15: An Evolving Issue

Chapter 15 of the United States Bankruptcy Code is a relatively recent addition to the American bankruptcy statute and it incorporates the United Nations Commission on International Trade Law Model Law on Cross-Border...more

EPA Reorganizes OPPT

The U.S. Environmental Protection Agency (EPA) Office of Pollution Prevention and Toxics (OPPT) recently noted that it successfully completed the Agency's reorganization process and that the effective date will be sometime...more

Sbarro LLC Confirms Plan of Reorganization

On Monday, May 29, 2014, the United States Bankruptcy Court for the Southern District of New York approved Sbarro LLC’s plan of reorganization, paving the way for the pizza restaurant chain to exit bankruptcy. Sbarro filed...more

To the Direct Acquirer Belong the Tax Attributes: Proposed Regulations Modify the Definition of Acquiring Corporation for Purposes...

On May 7, Treasury and the IRS published proposed regulations addressing which corporation succeeds to the tax attributes of another corporation that transfers assets in an acquisitive asset reorganization described in IRC §§...more

Lehman: New Limitations on Plan Payment of Individual Creditors’ Committee Members’ Professional Fees

In the recent case of Davis v. Elliot Mgmt. Corp. (In re Lehman Bros. Holdings Inc.), 2014 U.S. Dist. LEXIS 48102 (S.D.N.Y. Mar. 31, 2014), the District Court for the Southern District of New York issued a decision barring...more

Important changes to French Insolvency Legislation

Article 2 of Law no. 2014-1 of 2 January 2014 enabled the French government to simplify and secure the legislation relating to companies in difficulty. Following consultation with practitioners, the French government...more

Granting A Requested Job Transfer Can Be Considered An Adverse Employment Action

An employee who requested and was granted a lateral job transfer, and later sued for discrimination, was not precluded from claiming that the transfer was an "adverse employment action," according to a recent decision by the...more

Equitable Mootness: Two Recent Third Circuit Decisions

Equitable mootness is a judge-made remedy that is misnamed. Judges apply it to seek an equitable result, but mootness in the constitutional sense is absent. Article III, section 2 of the U.S. Constitution bars federal...more

Not All Recapitalizations Are Tax-Free

Code Section 368(a)(1)(E) generally allows a corporation to rejigger its debt and equity structure and then swap old interests for new interests with its stock and security holders, with no gain or loss to the current owners....more

Collecting Deficiency on Wholly-Unsecured Nonrecourse Loan (in Chapter 11)

Some of you who read the title of this post may have done a quick double-take, as it is well established that lenders may not collect a deficiency on a nonrecourse loan under state law. However, the Bankruptcy Code provides...more

What Must a Secured Creditor Do to Get Its Due?

Last month, the Fifth Circuit Court of Appeals ruled that a secured creditor’s claim survives bankruptcy where the secured creditor received notice of the case and was found to have not actively participated in it. Acceptance...more

Internal Reorganizations And Constructive Dismissal: Minimizing Risk

While not making new law, the recent Divisional Court decision in Ghanny v. 498326 Ontario Limited 2013 ONSC 4057 provides a useful reminder of the steps an employer should take to minimize the risk of constructive dismissal...more

TUPE on the Move: Key Changes Coming into Effect Next Year

As of 1 January 2014 there will be some small but important changes to TUPE. Employers who are planning on undertaking TUPE transfers in the near future may wish to consider whether or not to delay implementation to take...more

Legislature Repeals Subversive Organization Registration Law And Loosens Advance Notice Requirement For Reorganizations

Just over a year ago, I posted this piece on California’s World War II era Subversive Organization Registration Law. A few months later, the Assembly Committee on Judiciary suddenly introduced a bill, AB 1405, to repeal the...more

Fifth Circuit Rules Secured Creditors Who Snooze Do Not Lose

On August 5, 2013, the Fifth Circuit Court of Appeals ruled in Acceptance Loan Co., Inc. v. S. White Trans., Inc. (In re S. White Transp.) that a creditor's lien remained intact notwithstanding that the confirmed plan of...more

Bankruptcy Spurred By Court Judgment May Proceed For The Proper Purpose Of Reorganization; Judge's Adversarial Rulings And Remarks...

In In Re J. Howard Marshall (--- F.3d ----, C.A.9 (Cal.), June 28, 2013), the United States Court of Appeals considered the validity of a Chapter 11 bankruptcy filing. The bankruptcy had been challenged because it was...more

Two Recent Circuit Court Decisions on Cram Down

Two recent decisions by United States Circuit Courts of Appeal separately address the rights of secured creditors, unsecured creditors and equity holders under cram down plans of reorganization. In Wells Fargo Bank National...more

Burr Alert: The Basics Of Cramdown Interest Rates In Chapter 11

A debtor in a chapter 11 bankruptcy may treat a secured claim in one of two ways in its plan of reorganization: (1) the debtor may propose to cure any existing default, compensate the creditor for any loss sustained by the...more

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