Recent decisions reflect a renewed focus on lock-up provisions by bankruptcy courts.
The U.S. Bankruptcy Court for the Southern District of New York recently severed a provision from a post-petition agreement that required...more
7/31/2024
/ Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Commercial Bankruptcy ,
Corporate Counsel ,
Creditors ,
Debtors ,
Enforcement ,
Liquidity ,
New York ,
Popular ,
Reorganizations
In the absence of a formal declaration or notification to UNIDROIT, Alternative A (as adopted domestically by Sweden) is deemed to have no international effect and no applicability in U.S. bankruptcy case.
Although Sweden...more
The Fifth Circuit recently held that claims and defenses arising from an indemnification agreement with a debtor could not be asserted against a liquidation trust because the chapter 11 plan barred those claims and defenses,...more
3/19/2024
/ Beneficiaries ,
Bondholders ,
Bonds ,
Chapter 11 ,
Commercial Bankruptcy ,
Creditors ,
Debtors ,
Indemnification ,
Insolvency ,
Liquidation ,
Restructuring ,
Trusts
Two recent bankruptcy court decisions reflect a split of authority on subchapter V eligibility.
In re Macedon Consulting Inc. finds that all future amounts due under an unexpired lease qualify as “noncontingent and...more
3/13/2024
/ Bankruptcy Code ,
Bankruptcy Court ,
Business Ownership ,
Chapter 11 ,
Commercial Leases ,
Debt Collection ,
Investors ,
Landlords ,
Liability ,
Liquidity ,
Reorganizations ,
Small Business ,
Small Business Reorganization Act of 2019 (SBRA)
The Ninth Circuit Bankruptcy Appellate Panel holds that a discharge injunction does not bar an alter ego claim against a non-debtor where, under applicable law, the result of an alter ego finding is not to deem the entities...more
Distressed de-SPACed companies are increasingly turning to chapter 11 as a means of restructuring their debts and preserving going-concern value.
Many de-SPAC mergers in 2020 and 2021 involved pre-revenue or...more
7/25/2023
/ Bankruptcy Code ,
Business Plans ,
Chapter 11 ,
Coronavirus/COVID-19 ,
Corporate Restructuring ,
Interest Rates ,
Investors ,
Liquidity ,
Private Equity ,
Shareholders ,
Special Purpose Acquisition Companies (SPACs)
Lacking a common scheme or plan, two adjacent commercial condominium units owned by the same debtor and subject to the same mortgage and deed, but having different tenants, commercial uses, plans for commercial development...more
In rejecting an incidental beneficiary’s cure claim, the Second Circuit reasoned that affording a non-party administrative priority “would let it cut the line and stand in front of even secured creditors in exchange for...more
New York bankruptcy court breaks with precedent and endorses time approach for calculating lease termination damages over rent amount approach, resulting in smaller claims for landlords.
Time approach limits, and often...more
The Ninth Circuit BAP explains that “commercial or business activities” that satisfy section 1182(1)(A)’s Subchapter V eligibility requirement “would include not-for-profit businesses, and would not be limited to those having...more
Single asset real estate (SARE) is a unique classification under the Bankruptcy Code with implications for both debtors and lenders. SARE classification is apparent for a property such as a shopping center, apartment complex...more
“Can an unsecured creditor be better off when the debtor defaults rather than paying off the debt? Yes: Law can be stranger than fiction in the Preference Zone.”—Ninth Circuit
Untimely payment by tenants and other obligors...more
8/20/2020
/ Appeals ,
Bankruptcy Appellate Panel (BAP) ,
Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Chapter 7 ,
Commercial Tenants ,
Debtors ,
Default ,
Landlords ,
Late Payments ,
Letter of Credit ,
Preferential Transfers ,
Reversal ,
Security Deposits ,
Unsecured Debt
In a recent Delaware ruling, Judge Mary F. Walrath declines to follow the Fifth Circuit and holds that “a minority shareholder has [no] more right to block a bankruptcy… than a creditor does.”
Real estate and other lenders...more
Lenders should plan for real estate owner bankruptcies despite having a non-recourse carveout guaranty triggered by the owner’s bankruptcy filing.
Real estate bankruptcies may occur despite personal guaranties because...more
Multifamily condominium regimes with mounting liabilities and unpaid dues during COVID-19 may find answers in bankruptcy to the obstacles posed by individually titled units.
We created and implemented a strategy that allowed...more
Lease terminations may result in fraudulent transfer claims.
Lease terminations should document that the tenant is receiving reasonably equivalent value in exchange for rent forgiveness, relinquishing the premises and...more
Three Flint Hill may provide valuable lessons on the use of bankruptcy to reduce real estate debt to match present property values.
Chapter 11 strategies may exist for valuable real estate assets that are not producing...more
4/8/2020
/ Banks ,
Capital Assets ,
Capital Gains ,
Chapter 11 ,
Fair Market Value ,
Investment Funds ,
Lenders ,
Real Estate Development ,
Real Estate Investments ,
Refinancing ,
Rental Income
High Court review threatens to unravel Puerto Rico’s Title III bankruptcy cases.
The U.S. Supreme Court has agreed to review the First Circuit’s ruling invalidating the appointment of the members of the Puerto Rico...more
Reorganization plans providing for non-debtor releases (i.e., releasing non-debtors from claims by creditors of the debtor) have been regularly challenged in recent years, frequently by the United States Trustee and other...more