Section 365(h) of the Bankruptcy Code provides special protection for tenants if a trustee or chapter 11 debtor-in-possession ("DIP") rejects an unexpired lease under which the debtor was the lessor by giving the tenant the...more
On October 26, 2020, the U.S. Bankruptcy Court for the Southern District of Texas issued a long-awaited ruling on whether natural gas exploration and production company Ultra Petroleum Corp. ("UPC") must pay a make-whole...more
One year ago, we wrote that the large business bankruptcy landscape in 2019 was generally shaped by economic, market, and leverage factors, with notable exceptions for disastrous wildfires, liabilities arising from the opioid...more
In a leading precedent handed down in 2018—Sabine Oil & Gas Corp. v. Nordheim Eagle Ford Gathering, LLC (In re Sabine Oil & Gas Corp.), 734 Fed. Appx. 64 (2d Cir. May 25, 2018)—the U.S. Court of Appeals for the Second Circuit...more
After reaching a four-year high in 2018, the volume of heath care and medical industry bankruptcy filings in the United States continues to be significant. According to statistics provided by New Generation Research's...more
2/5/2021
/ Affordable Care Act ,
Automatic Stay ,
Chapter 11 ,
Commercial Bankruptcy ,
Coronavirus/COVID-19 ,
Fee-for-Service ,
Health Care Providers ,
Hospitals ,
Long Term Care Facilities ,
Physicians ,
Section 553
In 2019, the U.S. Court of Appeals for the Second Circuit made headlines when it ruled that creditors' state law fraudulent transfer claims arising from the 2007 leveraged buyout ("LBO") of Tribune Co. ("Tribune") were...more
12/29/2020
/ Bankruptcy Code ,
Chapter 11 ,
Commercial Bankruptcy ,
Financial Institutions ,
Fraudulent Conveyance ,
Fraudulent Transfers ,
Leveraged Buyout ,
Merit Management Group v FTI Consulting ,
Preemption ,
Safe Harbors ,
Section 546(e) ,
Stock Repurchases ,
Unjust Enrichment
The ability of a bankruptcy trustee or chapter 11 debtor-in-possession ("DIP") to obtain credit or financing during the course of a bankruptcy case is often crucial to the debtor's prospects for either maintaining operations...more
Postpetition financing provided by pre-bankruptcy shareholders or other "insiders" is not uncommon in chapter 11 cases as a way to fund a plan of reorganization and allow old shareholders to retain an ownership interest in...more
The ability of a bankruptcy trustee to avoid certain transfers of a debtor's property and to recover the property or its value from the transferees is an essential tool in maximizing the value of a bankruptcy estate for the...more
In Hafen v. Adams (In re Hafen), 616 B.R. 570 (B.A.P. 10th Cir. 2020), a bankruptcy appellate panel from the Tenth Circuit ("BAP") held that the bankruptcy court is the only court with subject-matter jurisdiction to decide...more
12/17/2020
/ Article III ,
Bankruptcy Appellate Panel (BAP) ,
Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Chapter 7 ,
Debtors-in-Possession ,
Exclusive Jurisdiction ,
Fraudulent Transfers ,
Standing ,
Statutory Authority ,
Subject Matter Jurisdiction
In the latest chapter of more than a decade of contentious litigation surrounding the 2007 leveraged buyout ("LBO") and ensuing bankruptcy of media conglomerate Tribune Co. ("Tribune"), the U.S. Court of Appeals for the Third...more
Courts sometimes disagree over whether provisions in a borrower's organizational documents designed to prevent the borrower from filing for bankruptcy are enforceable as a matter of federal public policy or applicable state...more
10/22/2020
/ Bankruptcy Code ,
Chapter 11 ,
Commercial Bankruptcy ,
Common Stock ,
Corporate Charters ,
Creditors ,
Fiduciary Duty ,
Lenders ,
Limited Liability Company (LLC) ,
Mortgage-Backed Securities ,
Operating Agreements ,
Parent Corporation ,
Public Policy ,
REIT ,
Special Purpose Entities ,
Uniform Commercial Code (UCC)
The practice of conferring "derivative standing" on official creditors' committees to assert claims on behalf of a bankruptcy estate in cases where the debtor or a bankruptcy trustee is unwilling or unable to do so is a...more
10/21/2020
/ Bankruptcy Code ,
Breach of Duty ,
Chapter 11 ,
Chapter 7 ,
Commercial Bankruptcy ,
Creditors ,
Debtors-in-Possession ,
Equitable Subordination ,
Limited Liability Company (LLC) ,
Real Party in Interest ,
Standing
"Cramdown" chapter 11 plans, under which a bankruptcy court confirms a plan over the objection of a class of creditors, are relatively common. Less common are the subset of cramdown plans known as "cram-up" chapter 11 plans....more
10/21/2020
/ Bankruptcy Code ,
Borrowers ,
Change of Control ,
Chapter 11 ,
Charter Communications ,
Commercial Bankruptcy ,
Cram Up ,
Cramdown ,
Credit Agreements ,
Creditors ,
First-Lien ,
Ipso Facto Clauses ,
Reorganizations ,
Senior Lenders ,
Special Purpose Entities
On June 22, 2020, the Federal Energy Regulatory Commission ("FERC") issued an order concluding that FERC and the U.S. bankruptcy courts have concurrent jurisdiction to review and address the disposition of natural gas...more
10/20/2020
/ Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Commercial Bankruptcy ,
Exclusive Jurisdiction ,
Executory Contracts ,
FERC ,
Filed-Rate Doctrine ,
PG&E ,
Power Purchase Agreements ,
Section 365
The U.S. Bankruptcy Court for the Southern District of New York recently added some weight to the majority rule on a hot-button issue for claims traders. In In re Firestar Diamond, Inc., 615 B.R. 161 (Bankr. S.D.N.Y. 2020),...more
"Safe harbors" in the Bankruptcy Code designed to insulate non-debtor parties to financial contracts from the consequences that normally ensue when a counterparty files for bankruptcy have been the focus of a considerable...more
10/16/2020
/ Bankruptcy Code ,
BAPCPA ,
Chapter 11 ,
Collateralized Debt Obligations ,
Credit Default Swaps ,
Flip Transactions ,
Ipso Facto Clauses ,
Non-Debtors ,
Safe Harbors ,
Special Purpose Vehicles ,
Swap Agreements
Valuation is a critical and indispensable part of the bankruptcy process. How collateral and other estate assets (and even creditor claims) are valued will determine a wide range of issues, from a secured creditor's right to...more
The U.S. Bankruptcy Court for the Eastern District of North Carolina recently added some weight to the majority rule on an issue that has long divided bankruptcy and appellate courts. In In re Southern Produce Distributors,...more
9/1/2020
/ Adversary Proceedings ,
Asset Transfer ,
Avoidance ,
Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Commercial Bankruptcy ,
Disallowance Defense ,
Disgorgement ,
Equitable Subordination ,
Reorganizations
The ability of a bankruptcy trustee or chapter 11 debtor-in-possession ("DIP") to sell assets of the bankruptcy estate "free and clear" of "any interest" in the property asserted by a non-debtor is an important tool designed...more
9/1/2020
/ Bankruptcy Code ,
Chapter 11 ,
Chapter 7 ,
Commercial Bankruptcy ,
Creditors ,
Debtors-in-Possession ,
Employee Retirement Income Security Act (ERISA) ,
Reorganizations ,
Section 363 ,
Successor Liability ,
Withdrawal Liability
With their doors closed by mandatory government shutdown orders in effect until most states started gradually reopening in May and June, many businesses have found it difficult or impossible to satisfy their lease obligations...more
It is generally well understood that an "oversecured" creditor is entitled to interest and, to the extent provided for under a loan agreement, related fees and charges as part of its secured claim in a bankruptcy case....more
The ability of a bankruptcy trustee or a chapter 11 debtor-in-possession ("DIP") to use "cash collateral" during the course of a bankruptcy case may be vital to the debtor's prospects for a successful reorganization. However,...more
6/8/2020
/ Bankruptcy Code ,
Bankruptcy Court ,
Business Judgment Rule ,
Chapter 11 ,
Collateral ,
Commercial Bankruptcy ,
Czyzewski v Jevic Holding Corp ,
Debtors-in-Possession ,
Mootness ,
Personal Property ,
Prohibited Transactions ,
Reorganizations ,
Section 363
The U.S. Supreme Court recently handed down three rulings potentially impacting bankruptcy cases.
Nunc Pro Tunc Relief -
In Roman Catholic Archdiocese of San Juan v. Acevedo Feliciano, No. 18-921, 2020 WL 871715 (U.S....more
6/4/2020
/ Appeals ,
Asset Seizure ,
Catholic Church ,
Chapter 11 ,
Federal Jurisdiction ,
Interim Remedies ,
Nunc Pro Tunc ,
Remand ,
Removal ,
Roman Catholic Archdiocese of San Juan Puerto Rico v Feliciano ,
SCOTUS ,
State Law Claims ,
Supreme Court of Puerto Rico ,
Trial Court Orders ,
Vacated
In a leading precedent handed down in 2018—Sabine Oil & Gas Corp. v. Nordheim Eagle Ford Gathering, LLC (In re Sabine Oil & Gas Corp.), 734 Fed. Appx. 64 (2d Cir. May 25, 2018)—the U.S. Court of Appeals for the Second Circuit...more
3/4/2020
/ Appeals ,
Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Commercial Bankruptcy ,
Contract Terms ,
Covenants that Run With the Land ,
Debtors-in-Possession ,
Energy Sector ,
Executory Contracts ,
Gathering Agreements ,
Midstream Contracts ,
Mineral Exploration ,
Oil & Gas ,
Privity of Contract ,
Sabine Oil and Gas ,
Section 365