A decision earlier this year in the LATAM Airlines Group bankruptcy addressed the validity of claims arising from intercompany loans between a corporate debtor’s affiliates. Judge James L. Garrity’s opinion overruling...more
A recent decision by the Second Circuit Court of Appeals has saved Citibank from the ramifications of an internal error that could have cost it nearly $900 million. Although the recipients of an unintended transfer of...more
Intercreditor disputes in bankruptcy are common. Typically, however, they center around predictable disagreements between senior or junior classes of creditors such as valuation battles or lien perfection challenges. A...more
A recent decision by Delaware Bankruptcy Judge John Dorsey will limit the ability of bankruptcy trustees to expand the lookback period for avoiding pre-bankruptcy transfers beyond the four years provided under most state law...more
A paper to be published soon in the University of Southern California Law Review, “The Rise of Bankruptcy Directors,” is sharply critical of the increased use of supposedly “independent directors” by distressed companies,...more
The allowance of postpetition interest in solvent debtor chapter 11 cases has become an important issue in recent years for corporate issuers, bondholders and other creditors. This post will examine a recent decision in the...more
The treatment of make-whole premiums in chapter 11 cases in solvent debtor cases has become an important issue in recent years for corporate issuers and bondholders. This post will examine a recent decision in the Hertz case...more
Two recent judicial decisions, Sanchez Energy and Tribune Media, highlight the challenges faced by indenture trustees and their professionals in chapter 11 cases where there are no recoveries to noteholders. Federal law...more
The U.S. Court of Appeals for the Third Circuit recently became the first circuit court to address the question of whether a corporate parent can set off an obligation that it owes to a bankrupt company against a claim owed...more
A recent decision by Judge Jed Rakoff of the Southern District of New York highlights the risks faced by directors and officers of companies in financial distress who fail to undertake properly their duties to the company and...more
The much-ballyhooed COVID relief bill passed by Congress at the end of last year, in addition to providing for $600 checks to millions of people, includes several COVID-related amendments to the U.S. Bankruptcy Code. Some of...more
The New York Court of Appeals recently handed down an important opinion on out of court restructurings involving bond debt. In CNH Diversified Opportunities Master Account, L.P., v. Cleveland Unlimited, Inc., the Court of...more
The economic fallout from the COVID-19 pandemic will leave in its wake a significant increase in commercial chapter 11 filings. Many of these cases will feature extensive litigation involving breach of contract claims,...more
U.S. Bankruptcy Judge Dennis Montali recently ruled in the Chapter 11 case of Pacific Gas & Electric (“PG&E”) that the Federal Energy Regulatory Commission (“FERC”) has no jurisdiction to interfere with the ability of a...more
9/13/2019
/ Bankruptcy Court ,
Chapter 11 ,
Commercial Bankruptcy ,
Exclusive Jurisdiction ,
Executory Contracts ,
FERC ,
Filed-Rate Doctrine ,
PG&E ,
Popular ,
Power Purchase Agreements ,
Section 365 ,
Utilities Sector
The Supreme Court this week resolved a long-standing open issue regarding the treatment of trademark license rights in bankruptcy proceedings. The Court ruled in favor of Mission Products, a licensee under a trademark license...more
5/28/2019
/ Bankruptcy Appellate Panel (BAP) ,
Bankruptcy Code ,
Breach of Contract ,
Commercial Bankruptcy ,
Debtors ,
Exclusions ,
Executory Contracts ,
IP License ,
Mission Product Holdings Inc v Tempnology LLC ,
Rescission ,
Reversal ,
SCOTUS ,
Section 365 ,
Split of Authority ,
Trademark Licenses ,
Trademarks ,
Trustees
Few issues in bankruptcy create as much contention as disputes regarding the right of setoff. This was recently highlighted by a decision in the chapter 11 case of Orexigen Therapeutics in the District of Delaware. Judge...more
The judicial power of the United States is vested in courts created under Article III of the Constitution. However, Congress created the current bankruptcy court system over 40 years ago pursuant to Article I of the...more
Southeastern Grocers (operator of the Winn-Dixie, Bi Lo and Harvey’s supermarket chains) recently completed a successful restructuring of its balance sheet through a “prepackaged” chapter 11 case in the District of Delaware....more
The Supreme Court’s recent decision in Merit Management Group, LP v. FTI Consulting, Inc. has appropriately drawn significant attention. The Court, by narrowing the “safe harbor” provision of Section 546(e) of the Bankruptcy...more
4/26/2018
/ Avoidance ,
Bankruptcy Code ,
Chapter 11 ,
Commercial Bankruptcy ,
Financial Institutions ,
Fraudulent Transfers ,
Intermediaries ,
Merit Management Group v FTI Consulting ,
Safe Harbors ,
SCOTUS ,
Section 546(e) ,
Trustees
The Supreme Court recently heard arguments in a patent dispute case, Oil States Energy Services, LLC v. Greene’s Energy Group, LLC. Although the case has nothing to do with bankruptcy law, its outcome could have a...more
In December 2015, U.S. Bankruptcy Court Judge Laurie Silverstein of the District of Delaware confirmed a plan of reorganization in the Millennium Lab Holdings chapter 11 case that included the non-consensual release of...more
The Supreme Court two years ago ruled in Baker Botts v. Asarco that bankruptcy professionals entitled to compensation from a debtor’s bankruptcy estate had no statutory right to be compensated for time spent defending against...more
The Supreme Court recently granted certiorari in PEM Entities LLC v. Levin, in which it will decide whether federal or a state law should apply when a debt claim held by a debtor’s insider is sought to be recharacterized in...more
In Millenium Lab Holdings, Delaware District Court Judge Leonard Stark, on an appeal from a bankruptcy court order confirming a plan of reorganization, recently upheld a challenge to the bankruptcy court’s constitutional...more
Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware handed down an important ruling last week that turned aside most of an unusual challenge to the fees and expenses of an indenture trustee in the...more