Bankruptcy and appellate courts disagree over the standard that should apply to a request for payment of a break-up fee or expense reimbursement to the losing bidder in a sale of assets outside the ordinary course of the...more
This post is about a junkyard, hogs getting slaughtered, and a bankruptcy judge poised to sanction a creditor and her counsel. The message from the case to would-be claimants in other cases is simple: do not “overreach.” In...more
Nothing is more frustrating to a trade creditor holding a large unpaid balance owed by a debtor in bankruptcy than the risk that payments the trade creditor received before the debtor filed bankruptcy may be clawed back by...more
In this series, we look at how various payment rights are treated in bankruptcy. A summary like this could not possibly address every right that might arise in any given bankruptcy case. We have omitted several of the...more
It is no secret that business bankruptcies are surging in the wake of the COVID-19 pandemic. In fact, chapter 11 filings increased 26% in the first half of 2020, and some expect the number of cases to increase even more in...more
A basic tenet of bankruptcy law, premised on the legal separateness of a debtor prior to filing for bankruptcy and the estate created upon a bankruptcy filing, is that prepetition debts are generally treated differently than...more
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
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
Amidst a surge in retail bankruptcies, two recent decisions construing section 503(b)(9) of the Bankruptcy Code directly limit suppliers’ ability to seek administrative claims for goods shipped to a debtor in the period...more
Delaware’s Bankruptcy Court has recently issued two insightful opinions that impact a creditor’s ability to establish the “receipt” element of a valuable 503(b)(9) administrative expense priority claim. CASE 1: In re SRC...more
Unsecured creditors frequently find themselves in the lurch when a company files for bankruptcy. One of the few mechanisms for recovering the value of goods supplied to a debtor prior to a bankruptcy case is an administrative...more
In an era when goods or materials often originate from suppliers or manufacturers outside the United States, bankruptcy courts are grappling with when “receipt” of goods occurs for the purpose of 503(b)(9) claims. While...more
Section 503(b)(9) of the Bankruptcy Code provides creditors with an administrative expense priority claim for value of goods that were received by the debtor in the ordinary course within the 20 days prior to the bankruptcy...more