Two recent cases out of the Third Circuit and the Southern District of New York highlight some of the developing formulas US courts are using when engaging with foreign debtors. In a case out of the Third Circuit, Vertiv v....more
When a majority of a company’s board approves a tender offer in good faith, can it still be avoided as an actually fraudulent transfer? Yes, says the Delaware Bankruptcy Court, holding that the fraudulent intent of a...more
Recently, in In re Moon Group Inc., a bankruptcy court said no, but the district court, which has agreed to review the decision on an interlocutory appeal, seems far less sure.
The bankruptcy court held that a lockbox...more
7/14/2023
/ Advances ,
Appeals ,
Bankruptcy Court ,
Chapter 11 ,
Chapter 7 ,
Credit Agreements ,
Debtors ,
Interlocutory Appeals ,
Lenders ,
Line of Credit ,
Liquidity ,
Notice of Default
The explosive growth in the use of social media for commercial advertising, product development and customer engagement, including via “influencers,” is well known and those accounts may have significant value. However, the...more
Yes, says the Delaware Bankruptcy Court in the case of CII Parent, Inc., cementing the advice routinely given by bankruptcy counsel to borrowers in default. We always counsel borrower clients in default of the risk associated...more
Under Section 101(54) of the bankruptcy code, any means of disposing with an interest in property is considered a transfer, and therefore, under certain circumstances, may be avoided as a preference or fraudulent transfer. In...more
Judge David S. Jones of the United States Bankruptcy Court for the Southern District of New York (Bankruptcy Court) recently denied Chapter 15 recognition of a Cayman Islands proceeding (Cayman Proceeding) in which the Cayman...more
Section 303(i) of the Bankruptcy Code authorizes the court to award the debtor sanctions on account of an improper filing of an involuntary petition against it. But can a non-debtor third-party obtain such a relief? Yes, says...more
12/16/2022
/ Automatic Stay ,
Bad Faith ,
Bankruptcy Code ,
Bankruptcy Court ,
Chapter 11 ,
Federal Rules of Bankruptcy Procedure ,
Fees ,
Involuntary Bankruptcy ,
Non-Debtors ,
PA Supreme Court ,
Sanctions
Introduction Under Delaware law, the board of directors of an insolvent company has wide latitude to pursue good-faith strategies to maximize the value of the firm. Trenwick Am. Litig. Tr. v. Ernst & Young, L.L.P., 906 A.2d...more
12/3/2021
/ Bankruptcy Court ,
Breach of Duty ,
Business Judgment Rule ,
Commercial Bankruptcy ,
Debt ,
Delaware General Corporation Law ,
Duty of Loyalty ,
Fiduciary Duty ,
Indemnification ,
Insolvency ,
Lenders ,
Liquidation ,
Motion to Dismiss ,
Personal Liability ,
Restructuring
In a recent opinion, the Bankruptcy Court for the District of Maryland dealt with a conflict between the strong presumption in favor of enforcing arbitration agreements and the Bankruptcy Code’s emphasis on centralization of...more
The application of sovereign immunity principles in bankruptcy cases has vexed the courts for decades. The U.S. Supreme Court’s opinions on the matter have not helped much. Although they have addressed the issue in specific...more
The United States Bankruptcy Court for the Southern District of Texas recently clarified the administrative expense standard applicable to indenture trustees by holding that they can recover fees and expenses as...more
In a first, the Bankruptcy Court for the Southern District of New York in the Arcapita Bank case had to decide whether Shari’a compliant investment agreements, providing for Murabaha and Wakala transactions, qualify for the...more
In a recent decision, the Bankruptcy Court for the Southern District of New York held that a purported debt held by an entity with a near-majority membership interest in the Debtor was actually equity disguised as a loan. ...more
In a recent decision, the Court of Appeals for the Sixth Circuit held that the election of a tenant, under Section 365(h) of the Bankruptcy Code, to remain in possession of real property governed by a rejected lease causes a...more
No, says the Delaware Bankruptcy Court in In re Maxus Energy Corp. In Maxus, the defendant, Vista Analytical Laboratory, Inc. (“Vista” or the “Defendant”), a designated critical vendor, sought summary judgement dismissing the...more
It is well established that by filing a proof of claim in bankruptcy, a creditor submits itself to the equitable jurisdiction of the bankruptcy court and waives any right it would otherwise have to a jury trial with respect...more
The consequences of an order or judgement being final or interlocutory are enormous. An order from an interlocutory order requires leave since these orders are not appealable as of right. In addition, a failure to obtain...more
1/28/2020
/ Appeals ,
Automatic Stay ,
Bankruptcy Court ,
Commercial Bankruptcy ,
Creditors ,
Debtors ,
Dismissals ,
Federal Rules of Bankruptcy Procedure ,
Final Judgment ,
Interlocutory Orders ,
Mootness ,
Motion for Relief from Automatic Stay ,
Non-Appealable Decisions ,
Reaffirmation ,
Right To Appeal ,
Ritzen Group Inc v Jackson Masonry LLC ,
SCOTUS ,
Time-Barred Claims
Yes, says the Third Circuit. The Third Circuit recently held that the Bankruptcy Court has the authority to confirm a chapter 11 plan which contains nonconsensual, third-party releases when such releases are integral to the...more
1/13/2020
/ Bankrtupcy Confirmation Plans ,
Bankruptcy Court ,
Centers for Medicare & Medicaid Services (CMS) ,
Chapter 11 ,
Commercial Bankruptcy ,
Constitutional Challenges ,
Counterclaims ,
Creditors ,
Debtors ,
Department of Justice (DOJ) ,
Equity Investors ,
Injunctions ,
Judicial Authority ,
Lenders ,
Liquidity ,
Non-Consensual Rights ,
Reorganizations ,
Scope of Authority ,
Settlement Agreements ,
Shareholders ,
Stern v Marshall ,
Third-Party Release Agrements ,
Transfer of Assets
Periods of volatility in energy prices cause spikes in energy companies’ bankruptcies. These bankruptcies lead to debtors’ attempts to reject power purchase agreements (“PPAs”). These attempts ignite the unresolved legal...more
1/2/2020
/ Administrative Authority ,
Appeals ,
Bankruptcy Court ,
Business Judgment Rule ,
Commercial Bankruptcy ,
Debtors ,
Energy Projects ,
Energy Sector ,
Exclusive Jurisdiction ,
Executory Contracts ,
Federal Power Act ,
FERC ,
Filed-Rate Doctrine ,
Jurisdiction ,
PG&E ,
Power Purchase Agreements ,
Rejection Notices
Following various disputes as to the scope of the collateral given to secured creditors, the debtors and certain of their noteholders jointly proposed a chapter 11. The plan included a rights offering that the consenting...more
Bankruptcy Rule 2004 allows the examination of any entity with respect to various topics, including conduct and financial condition of the debtor and any matter that may affect the administration of the estate. Does a...more
Two United States Bankruptcy Judges for the Southern District of New York recently issued a joint opinion addressing common issues raised by motions to dismiss in two separate adversary proceedings – one pending before Judge...more
5/14/2018
/ Adversary Proceedings ,
Appeals ,
Avoidance ,
Bankruptcy Court ,
Breach of Duty ,
Chapter 11 ,
Chapter 15 ,
Comity ,
Commercial Bankruptcy ,
Conservators ,
Debtors ,
Dismissals ,
Fiduciary Duty ,
Financial Crisis ,
Foreign Banks ,
Forum Non Conveniens ,
Forum Shopping ,
Fraudulent Transfers ,
Insolvency ,
International Litigation ,
Judicial Review ,
Motion to Dismiss ,
Multi-Jurisdictional Litigation ,
Parent Corporation ,
Receivership ,
Stays ,
Ultra Vires