This post is about a junkyard, hogs getting slaughtered, and a bankruptcy judge poised to sanction a creditor and her counsel. The message from the case to would-be claimants in other cases is simple: do not “overreach.” In...more
The concept of “property of the estate” is important in bankruptcy because it determines what property can be used or distributed for the benefit of the debtor’s creditors. Defined by section 541 of the Bankruptcy Code,...more
It’s often hard to persuade a bankruptcy court to grant a motion for substantial contribution. Any attorney thinking about making a motion should first ask herself two questions. First, has my work benefitted both my client...more
12/29/2022
/ Alter Ego ,
Bankruptcy Court ,
Bankruptcy Trustees ,
Breach of Duty ,
Chapter 11 ,
Commercial Bankruptcy ,
Contribution Claims ,
Creditors ,
Debtors ,
Fraud ,
Section 503
We have previously blogged about Siegel v. Fitzgerald, the Supreme Court decision last June that invalidated the 2018 difference in fees between bankruptcy cases filed in Bankruptcy Administrator judicial districts and U.S....more
12/2/2022
/ Bankruptcy Court ,
Bankruptcy Trustees ,
Certiorari ,
Commercial Bankruptcy ,
Constitutional Challenges ,
Debtors ,
Fees ,
Remedies ,
SCOTUS ,
Siegel v. Fitzgerald ,
Uniformity ,
Vacated
Another domino has fallen. Earlier this year, we wrote about the challenges facing the crypto industry that resulted in the bankruptcy filings of Three Arrows Capital, Celsius Network, and Voyager Digital. We noted that...more
A U.S. bankruptcy court recently denied chapter 15 recognition to a case in the Isle of Man (IOM). The court ruled that the foreign case was neither a foreign main proceeding nor a foreign non-main proceeding...more
To encourage parties to transact with debtors in bankruptcy, the Bankruptcy Code in corporate bankruptcies provides highest priority to “administrative expenses,” which include “the actual, necessary costs and expenses of...more
On September 15, President Biden announced a tentative deal with unions representing tens of thousands of railroad workers that helped narrowly avoid a strike that threatened to devastate the country’s delicate supply chains...more
A bankruptcy court ruled that a creditor didn’t need to seek derivative standing to sue a liquidating trustee. The creditor, himself a trustee of the debtor’s employee stock-option plan, had standing to sue without prior...more
The owners of an ambitious Hawaiian golf project in the Makaha Valley of Oahu said Aloha (hello) to new owners, and Aloha (goodbye) to old debt obligations...more
We have previously written about Siegel v. Fitzgerald, No. 21-441, the Supreme Court case considering the question of whether the 2018 difference in fees between Bankruptcy Administrator judicial districts and U.S. Trustee...more
A Delaware bankruptcy court recently held that Texas’s “trust fund doctrine” remains applicable for companies that have not availed themselves of Texas’s formal dissolution process. Nonetheless, fiduciary claims by a...more
6/30/2022
/ Bankruptcy Court ,
Breach of Duty ,
Business Litigation ,
Chapter 7 ,
Debtors ,
Delaware ,
Fiduciary Duty ,
Texas ,
Trust Funds ,
Trustees ,
TX Supreme Court
As a result of Purdue Pharma’s proposed plan of reorganization, and the ongoing opioid epidemic that continues to grip the nation, the debate over non-consensual third-party releases has gone mainstream despite being a...more
Article I, Section 8 of the United States Constitution gives Congress the power to “establish . . . uniform Laws on the subject of Bankruptcies throughout the United States.” While Congress has general authority to...more
“[E]nsnared between his involvement in a business that is legal under the laws of Arizona but illegal under federal law,” one debtor’s chapter 13 petition was recently dismissed due to his undisputed violations of the...more
Another case shows the perils of waiting until the final minutes to meet a court deadline. In re U-Haul, 21-bk-20140, 2021 Bankr LEXIS 3373 (Bankr. S.D. W. Va. Dec. 10, 2021).
The debtor is a well-known truck rental...more
“Messrs. Woods and Wu are fraudsters,” Judge Christopher S. Sontchi declared in the opening salvo of his scathing opinion. According to the former Chief Judge of the U.S. Bankruptcy Court for the District of Delaware, Woods...more
11/29/2021
/ Bankruptcy Court ,
CARES Act ,
Civil Contempt Orders ,
Coronavirus/COVID-19 ,
Debtors ,
Delaware ,
Evidence ,
Fraud ,
Paycheck Protection Program (PPP) ,
Preliminary Injunctions ,
Relief Measures
A federal judge recently allowed a trustee’s preferential transfer claim against a law firm to proceed but dismissed a constructive fraudulent transfer claim. The decision highlights the pleading standards and analytical...more
In many chapter 11 cases, creditors’ committees can play a vital role in maximizing the recoveries of unsecured creditors. But the powers of creditors’ committees are circumscribed by both the Bankruptcy Code and case law....more
U.S. Bankruptcy Judge Craig A. Gargotta rejected a debtor’s attempt to use “CARES Act” funds, which it did not actually qualify for, to pay creditors in its chapter 11 case.
BR Healthcare Solutions (the “Debtor”)...more
10/20/2021
/ Bankruptcy Court ,
CARES Act ,
Centers for Medicare & Medicaid Services (CMS) ,
Chapter 11 ,
Commercial Bankruptcy ,
Coronavirus/COVID-19 ,
Creditors ,
Debtors ,
Department of Health and Human Services (HHS) ,
Healthcare ,
Paycheck Protection Program (PPP) ,
Small Business
Some courts permit debtors to designate vendors crucial to their business as “critical vendors.” These vendors supply debtors with necessary goods or services. Debtors are permitted to pay them amounts owing when a...more
The Bankruptcy Code grants the power to avoid certain transactions to a bankruptcy trustee or debtor-in-possession. See, e.g., 11 U.S.C. §§ 544, 547–48. Is there a general requirement that these avoidance powers only be...more
A creditor in bankruptcy must normally file a proof of claim by a certain specified time, known as the bar date, or have its claim be barred. Bankruptcy Rule 3002(c)(6)(A) provides a narrow exception to this rule when a...more
United States Bankruptcy Judge Harlin Hale recently dismissed the National Rifle Association’s Chapter 11 petition as not filed in good faith. The decision leaves the 150-year-old gun-rights organization susceptible to the...more
A recent case shows how even late payments can be used to satisfy the ordinary course of business defense in a preference avoidance action. Baumgart v. Savani Props Ltd. (In re Murphy), Case No. 20-11873, Adv. Pro. No....more