We now address assets sales under Bankruptcy Code section 363. The statute allows debtors to use, sell, or lease their property in the ordinary course of business without court permission. But a debtor’s use, sale, or lease...more
4/17/2019
/ 363 Sales ,
Approval Requirements ,
Auction ,
Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Commercial Bankruptcy ,
Commercial Leases ,
Debtors ,
Private Sales ,
Public Bidding ,
Sale of Assets
When a debtor files for bankruptcy, almost all proceedings to recover property from the debtor are automatically stayed by force of law. See 11 U.S.C. § 362(a). This provision, known as the automatic stay, is a central...more
It’s time for a primer on the Wagoner rule and the in pari delicto defense, two concepts that arise when a debtor’s fraud leads to bankruptcy. Trustees who replace a debtor’s management often sue those involved in the...more
When a party files for bankruptcy, the Bankruptcy Code imposes an automatic stay of litigation against a debtor for claims arising prior to the commencement of the bankruptcy case. See 11 U.S.C. § 362(a). Where there is a...more
If the National Labor Relations Board (“NLRB”) fines an employer for unlawfully firing workers who tried to unionize, can the employer discharge the fine in bankruptcy, or will the exception to discharge found in Bankruptcy...more
2/7/2019
/ Administrative Law Judge (ALJ) ,
Affirmative Defenses ,
Appeals ,
Back Pay ,
Bankruptcy Code ,
Bankruptcy Court ,
Chapter 7 ,
Debtors ,
Dischargeable Debts ,
Employee Rights ,
Employer Liability Issues ,
Hiring & Firing ,
Just Cause ,
NLRA ,
NLRB ,
Personal Liability ,
Section 7 ,
Union Organizers ,
Willful Violations
A court in New York has allowed offshore debtors to take control of an investment account in the U.S. over the objection of a shareholder. At stake was the court’s discretion to permit chapter 15 debtors to access the funds...more
Fraudulent transfer law allows creditors and bankruptcy trustees, under certain circumstances, to sue transferees to recover funds received where a debtor’s transfers to the transferees actually or constructively defrauded...more
A sex-abuse scandal has landed another organization in bankruptcy court. USA Gymnastics (“USAG”) filed chapter 11 last week in Indiana following a team doctor’s conviction for abusing hundreds of girls.
...more
In a recent cross-border insolvency case, In re Agrokor d.d., 591 B.R. 163 (Bankr. S.D.N.Y. 2018), Judge Glenn of the United States Bankruptcy Court for the Southern District of New York recognized and enforced a...more
Defendants in a lawsuit didn’t waive their right to arbitrate even after moving to dismiss and answering a complaint, a court held last week. Arbitration wasn’t waived because the defendants hadn’t filed affirmative defenses...more
11/20/2018
/ Affirmative Defenses ,
Arbitration ,
Arbitration Agreements ,
Bankruptcy Court ,
Chapter 13 ,
Counterclaims ,
Debtors ,
Deed of Trust ,
Discovery ,
Mortgage Lenders ,
Motion for Summary Judgment ,
Motion to Dismiss ,
Prejudice
Started as a mail-order retailer, evolved to brick-and-mortar stores in urban areas and expanded to a big-box retailer through merger, Sears is now facing the most turbulent time in its history. On October 15, 2018, Sears...more
10/24/2018
/ Bankruptcy Court ,
Chapter 11 ,
Commercial Bankruptcy ,
Debt Financing ,
Debt Restructuring ,
Debtors ,
Debtors-in-Possession ,
Lenders ,
Liquidity ,
Retailers ,
Sears
It’s hard to find something positive these days to write about Venezuela. Some basic facts tell the story of the misery there.
Consumer prices this year might rise one million percent. The minimum wage was increased by...more
10/19/2018
/ Appeals ,
Arbitration ,
Arbitration Awards ,
Banking Sector ,
Bonds ,
Chamber of Commerce ,
Corruption ,
Debt ,
Debt Restructuring ,
Economic Sanctions ,
Enforcement Actions ,
Exports ,
ICSID ,
Motion To Stay ,
Oil & Gas ,
Oil Reserves ,
Settlement Agreements ,
Venezuela
When a bankruptcy petition is filed, an automatic stay comes into effect staying proceedings against the debtor or the debtor’s property. 11 U.S.C. § 362(a). The stay centralizes litigation regarding the debtor and its...more
10/1/2018
/ Automatic Stay ,
Bankruptcy Code ,
Bankruptcy Court ,
Borrowers ,
Chapter 11 ,
Chapter 7 ,
Consumer Lenders ,
Debtors ,
Liquidation ,
Loans ,
Mandatory Arbitration Clauses ,
Motion for Relief
The Third Circuit denied a $275 million break-up fee to a bidder that was unsuccessful in its attempt to buy the crown-jewel assets in the high-profile EFH bankruptcy case. In re Energy Future Holdings Corp., No 18-1109, 2018...more
Bankruptcy plans often include provisions releasing debtors and their officers and directors from certain potential liability. In Zardinovsky v. Arctic Glacier Income Fund, No. 17-2522 (3d Cir. Aug. 20, 2018), the United...more
The Bankruptcy Court in Delaware recently denied a request for an administrative expense claim to an entity that tried but failed to buy a debtor’s key assets. The decision arises out of the first of three attempts by...more
8/9/2018
/ Administrative Expenses ,
Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Commercial Bankruptcy ,
Competitive Bidding ,
Contribution Claims ,
Creditors ,
Debtors ,
Merger Agreements ,
Purchasers
An accounting firm in the United States must produce workpapers to a chapter 15 foreign representative even if the law where the foreign main proceeding is pending would not permit such production. CohnReznick LLP v. Foreign...more
Section 327(a) of the Bankruptcy Code imposes restrictions on the employment of professionals to assist a trustee, requiring that such professionals “not hold or represent an interest adverse to the estate” and be...more
On June 4, the Supreme Court decided Lamar, Archer & Cofrin, LLP v. Appling, No. 16-1215, in a unanimous opinion by Justice Sotomayor. The Court affirmed the Eleventh Circuit and resolved a circuit split about the meaning of...more
6/15/2018
/ Adversary Proceedings ,
Appeals ,
Bankruptcy Code ,
Business Assets ,
Chapter 7 ,
Commercial Bankruptcy ,
Congressional Intent ,
Debtors ,
Dischargeable Debts ,
False Statements ,
Judgment Creditors ,
Lamar Archer & Cofrin LLP v Appling ,
Oral Communications ,
Reaffirmation ,
SCOTUS ,
Tax Returns
Judge Martin Glenn granted recognition to a UK scheme of arrangement with third-party releases that lacked full creditor consent. In re Avanti Communs. Grp., PLC, No. 18-10458, 2018 Bankr. LEXIS 1078 (Bankr. S.D.N.Y. Apr. 9,...more
6/5/2018
/ Bankruptcy Code ,
Bankruptcy Court ,
Chapter 15 ,
Commercial Bankruptcy ,
Consent ,
Creditors ,
Debtors ,
Enforcement ,
Scheme of Arrangement ,
Third-Party Release Agrements ,
UK
In a recent decision, In re B.C.I Fins. Pty Ltd. (In Liquidation), No. 17-11266, 2018 Bankr. LEXIS 1217 (Bankr. S.D.N.Y. Apr. 24, 2018), Judge Sean Lane granted a chapter 15 petition after rejecting a challenge to...more
5/18/2018
/ Australia ,
Bankruptcy Code ,
Breach of Duty ,
Chapter 15 ,
Choice-of-Law ,
Commercial Bankruptcy ,
Creditors ,
Debtors ,
Fiduciary Duty ,
Intercompany Transactions ,
Jurisdiction ,
Liquidation
Section 544 of the Bankruptcy Code permits a bankruptcy trustee to avoid any transfer that would be avoidable by creditors under state fraudulent transfer law. Section 550 of the Bankruptcy Code permits the bankruptcy trustee...more
In BFP v. Resolution Tr. Corp., 511 U.S. 531 (1994), the Supreme Court held that a mortgage foreclosure sale conducted in accordance with state law was shielded from avoidance under the Bankruptcy Code’s fraudulent conveyance...more
The Bankruptcy Code provides for the appointment of a creditors’ committee in chapter 11 bankruptcy cases. See 11 U.S.C. § 1102. There is no parallel provision applicable to chapter 7 cases. When a bankruptcy case is...more
3/30/2018
/ Appeals ,
Bankruptcy Code ,
Bankruptcy Court ,
Bylaws ,
Chapter 11 ,
Chapter 7 ,
Commercial Bankruptcy ,
Corporate Dissolution ,
Creditors ,
Czyzewski v Jevic Holding Corp ,
Debtors ,
Due Process ,
Settlement ,
Transfer of Rights ,
Trustees
This post reviews some concepts concerning executory contracts. The ground covered will be familiar to insolvency experts and should be insightful for readers who don’t specialize in U.S. bankruptcy law.
The springboard...more
3/21/2018
/ Bankruptcy Code ,
Bankruptcy Court ,
Business Ownership ,
Business Transfer Agreements ,
Chapter 11 ,
Commercial Bankruptcy ,
Debtors ,
Executory Contracts ,
Insolvency ,
Non-Disparagement Provisions ,
Settlement Agreements