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
A discharge of debt in bankruptcy “operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of...more
It is well-settled that if you are a debtor in chapter 11, you do not have the unfettered right to convert the case to a chapter 7 liquidation. A recent 10th Circuit decision shows why. Kearney v. Unsecured Creditors...more
When serving pleadings in an adversary proceeding, you may want to skip the certified option and go with regular first-class mail, or do both.
Federal Rule of Bankruptcy Procedure 7004 governs service of process in...more
It’s rare for a debtor in bankruptcy to raise allegations of involuntary servitude and a violation of the Thirteenth Amendment. But one debtor did just that after a chapter 11 trustee was appointed to take over the debtor’s...more
It is well known in the restructuring world that a debtor in bankruptcy can’t get a PPP loan. But what if you’re a debtor and decide a PPP loan could save your business? Will a court dismiss the case so you can seek a loan?...more
3/9/2021
/ Appeals ,
Bankruptcy Code ,
Bankruptcy Court ,
Commercial Bankruptcy ,
Coronavirus/COVID-19 ,
Corporate Counsel ,
Creditors ,
Debtors ,
Motion to Dismiss ,
Paycheck Protection Program (PPP) ,
Relief Measures ,
Small Business
A seat at the table: this is what you likely want when your financial interests are drawn into a bankruptcy court proceeding. You’ll seek to be heard and do what you can to maximize your recovery. This is especially true if...more
Perfect your liens on time or you may lose them. That’s the painful lesson U.S. Bankruptcy Judge Karen B. Owens taught Halliburton Energy Services, Inc. in her recent decision.
Ruling on plaintiff-debtor Southland Royalty...more
We have blogged previously about section 546(e), the Bankruptcy Code’s safe harbor for certain transfers otherwise subject to avoidance as preferences or fraudulent transfers. See 11 U.S.C. § 546(e). Among the transfers...more
Every so often, we post an article on case law discussing proofs of claim. The decisions often contain basic but important information about the timing and manner of claim filing.
One set of cases concerns whether a claim...more
In sophisticated real estate financing transactions, most prudent lenders attempt to deter borrowers from filing for bankruptcy before loans are paid in full by providing in loan documents that such a filing constitutes an...more
12/29/2020
/ Bankruptcy Code ,
Bankruptcy Court ,
Borrowers ,
Foreclosure ,
Land Developers ,
Lenders ,
Loan Documentation ,
Loans ,
Real Estate Financing ,
Single-Asset Debtor ,
Underwriting
The Bankruptcy Code enables a trustee to set aside certain transfers made by debtors before bankruptcy. See 11 U.S.C. §§ 544, 547, 548. These avoidance powers are subject to certain limitations, including a safe harbor in...more
There are several ways in which property owners can advantageously use the Bankruptcy Code to effectuate strategic dispositions of assets. But the bankruptcy process can be fraught with uncertainty that can upend the best...more
Last February, we blogged about the Third Circuit’s decision in In re Energy Future Holdings Corp, No. 19-1430, 2020 U.S. App. LEXIS 4947 (Feb. 18, 2020). The Third Circuit approved a process for resolving asbestos claims in...more
This post concerns computation of time under Bankruptcy Rule 9006. The specific issue addressed is whether a bankruptcy court — when computing a filing deadline — should count a day when its clerk’s office is closed, even if...more
The paycheck protection program (“PPP”) has been one of the most popular aspects of the CARES Act (i.e., the initial legislation responding to the COVID-19 pandemic). Yet, as has been widely reported, debtors in chapter 11...more
In an appeal of a bankruptcy court’s decision, a district court judge recently addressed the treatment of the “straddle year” for federal income tax under the Bankruptcy Code, which “does not appear to have been decided by...more
Section 550 of the Bankruptcy Code provides that, when a transfer is avoided under one of several other sections of the Code, a trustee may recover “the property transferred, or, if the court so orders, the value of such...more
This post provides a quick primer on the administrative expense claims. These claims are entitled to priority for actual and necessary goods and services supplied to a debtor in bankruptcy. For a claim to qualify for...more
Courts reviewing a bankruptcy court’s decision to approve a chapter 11 reorganization plan over the objections of an interested party must consider not only the merits, but also (if implementation of the plan was not stayed)...more
A recent decision, In re: Grandparents.com, Inc.., et al., Debtors. Joshua Rizack, as Liquidating Tr., Plaintiff, v. Starr Indemnity & Liability Company, Defendant, Additional Party Names: Grand Card LLC, provides insight on...more
Most bankruptcy courts have altered their practices and procedures in light of COVID-19. Below is a summary of the changes to practices and procedures in the United States Bankruptcy Courts for the Southern District of New...more
COVID-19 has sent the price of oil per barrel in a downward spiral. The plummet in business travel, cruises, vacations, weekend getaways, and non-essential travel have all led to a decreased demand for oil.
The resultant...more
COVID-19 is taking an alarming and unfortunate toll on our country’s population. Each day, we collectively face daunting health risks, and the economic cost to individuals and businesses alike has already been, and will...more