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Liquidating Chapter 11 Plan Confirmed Despite Provision Temporarily Enjoining Litigation Against Corporate Debtors

To prevent "trafficking in corporate shells," the Bankruptcy Code prohibits any discharge of corporate or partnership debts if the debtor is not an "individual" and, in a chapter 11 case, if the debtor proposes a liquidating...more

Chapter 15 Recognition Order and Relief Could Be Modified After Conversion of Foreign Debtor's Reorganization to Liquidation

Corporate restructurings are not always successful for many reasons. As a consequence, the bankruptcy and restructuring laws of the United States and many other countries recognize that a failed restructuring may be followed...more

Second Circuit Weighs In on Bankruptcy Code v. Chapter 11 Plan Impairment and the Solvent-Debtor Exception

A handful of recent high-profile court rulings have considered whether a chapter 11 debtor is obligated to pay postpetition, pre-effective date interest ("pendency interest") to unsecured creditors to render their claims...more

Liquidating Chapter 11 Debtor Excused from Providing WARN Act Notification of Employee Layoffs Due to Pandemic Natural Disaster

Large employers intending to lay off a significant number of their employees are required by the Worker Adjustment and Retraining Notification Act of 1988 (the "WARN Act") to give the targeted employees 60 days' advance...more

New York Bankruptcy Court Rules that Good Faith Is Not the Gatekeeper to Chapter 15

Despite the absence of any explicit directive in the Bankruptcy Code, it is well understood that a debtor must file a chapter 11 petition in good faith. The bankruptcy court can dismiss a bad faith filing "for cause,"...more

New York Bankruptcy Court Rules that Good Faith Is Not the Gatekeeper to Chapter 15

Despite the absence of any explicit directive in the Bankruptcy Code, it is well understood that a debtor must file a chapter 11 petition in good faith. The bankruptcy court can dismiss a bad faith filing "for cause," which...more

Second Circuit: Madoff Ponzi Scheme Customers Did Not Receive Fictitious Profit Payments "For Value"

In the latest chapter of more than a decade of litigation involving efforts to recover fictitious profits paid to certain customers of Bernard Madoff's defunct brokerage firm as part of the largest Ponzi scheme in history,...more

Chapter 11 Plan Distributions Are Not Collateral Covered by Intercreditor Agreement's Waterfall Provision

In In re Energy Future Holdings Corp., 2019 WL 2535700 (3d Cir. June 19, 2019), a panel of the U.S. Court of Appeals for the Third Circuit ruled that adequate protection payments made during a bankruptcy case and...more

Foreign Debtor’s COMI Shift Dooms Bid for Chapter 15 Recognition

In In re O’Reilly, 598 B.R. 784 (Bankr. W.D. Pa. 2019), the U.S. Bankruptcy Court for the Western District of Pennsylvania denied the petition of a foreign bankruptcy trustee for recognition under chapter 15 of the Bankruptcy...more

Third Circuit Rules That WARN Act's "Unforeseeable Business Circumstances" Exception Requires That Layoffs Be Probable, Not...

In Varela v. AE Liquidation, Inc. (In re AE Liquidation, Inc.), 866 F.3d 515 (3d Cir. 2017), the U.S. Court of Appeals for the Third Circuit became the sixth circuit court of appeals to rule that a "probability standard"...more

Cross-Border Bankruptcy Update: COMI Migration and Illegitimate COMI Manipulation Distinguished

With the significant increase in cross-border bankruptcy and insolvency filings in the 43 nations or territories that have adopted the UNCITRAL Model Law on Cross-Border Insolvency (the "Model Law"), including the U.S., the...more

International Legislative Update - September/October 2017

Germany—Major German insolvency law reforms designed to facilitate corporate group insolvencies will become effective on April 21, 2018. When the reforms come into force, they will supplement and complement the Recast...more

Ninth Circuit Rules That Hypothetical Preference Actions May Be Considered in Applying the Greater Amount Test

In Schoenmann v. Bank of the West (In re Tenderloin Health), 849 F.3d 1231 (9th Cir. 2017), a divided panel of the U.S. Court of Appeals for the Ninth Circuit recently addressed as a matter of apparent first impression...more

Second Circuit Affirms Bankruptcy Court’s Nullification of Chapter 15 Debtor’s Sale of Claim Due to Woefully Inadequate Price

In the March/April 2013 edition of the Business Restructuring Review, we reported on an opinion by the U.S. Bankruptcy Court for the Southern District of New York concluding that a chapter 15 debtor’s sale of claims against...more

Two Recent Decisions Demonstrate Continued Disagreement Over Whether Economic Value or Face Amount of Liens Is Appropriate Metric...

The ability of a trustee or chapter 11 debtor in possession ("DIP") to sell bankruptcy estate assets "free and clear" of liens on the property under section 363(f) of the Bankruptcy Code has long been recognized as one of the...more

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