The “Catch-22” of Preference Law
The ordinary course of business, new value, and contemporaneous exchange for new value defenses are the most frequently used defenses in a preference action. However, there are additional, less common defenses that a...more
A debtor's non-exempt assets (and even the debtor's entire business) are commonly sold during the course of a bankruptcy case by the trustee or a chapter 11 debtor-in-possession ("DIP") as a means of augmenting the bankruptcy...more
In a March 2024 decision, the U.S. Bankruptcy Appellate Panel for the First Circuit (the “Panel”) followed existing case law prohibiting debtors in businesses related to cannabis from availing themselves of federal bankruptcy...more
Businesses in financial distress have multiple options to consider when attempting to reorganize or liquidate. A state court receivership or Chapter 7 Bankruptcy are likely options for liquidation when there are significant...more
The Fifth Circuit recently ruled that a debtor can sell a preferential transfer action under Bankruptcy Code section 363 to a purchaser that is not a representative of the bankruptcy estate. Briar Cap. Working Fund Cap.,...more
As we turn to a new year, my wife and I like to reminisce about our best days and milestones of the prior year (for 2023, it was a huge celebration with our best friends for my wife’s birthday, an epic bike ride with our kids...more
As bankruptcy attorneys who often defend clients in preference avoidance actions, we were pleased with the 547(b) amendments, effective as of February 20, 2020, requiring a trustee to conduct some level of due diligence into...more
There is longstanding controversy concerning the validity of third-party release provisions in non-asbestos trust chapter 11 plans that limit the potential exposure of various nondebtor parties involved in the process of...more
The Bankruptcy Code and its predecessor statutes have long permitted bankruptcy trustees (or their equivalents) to claw back preferences, which involve transfers made on preexisting debts within 90 days (or 1 year, if made to...more
Section 363(m) of the Bankruptcy Code provides that the reversal or modification of an order approving a sale or lease of assets in bankruptcy does not affect the validity of the sale or lease to a good-faith purchaser or...more
This will continue our series on bankruptcy schedules. In a prior blog post, we looked at Schedule A/B. Today, our focus will be on Schedule C related to the claiming of exemptions. ...more
This will be the first in a series of blog posts that will focus on completing bankruptcy schedules. We’ll start in this blog with the first schedule – Schedule A/B. ...more
This entry is part of Nelson Mullins’s ongoing “Bankruptcy Basics” blog series that is intended to address foundational aspects of bankruptcy for new and non-bankruptcy practitioners and professionals. This entry will discuss...more
There is seemingly, in the opinion of a great number of bankruptcy courts, a conflict between the United States Bankruptcy Code requirements that a debtor reorganize or liquidate “in good faith,” the federal Controlled...more
Faulkner v. Broadway Festivals, Inc. The recent bankruptcy case for Northern District of Texas, Faulkner v. Broadway Festivals, Inc., Adv. Proc. 20-05031 (Bankr. N.D. – Tex., January 11, 2022), addresses preferential...more
Industry News - Purdue Pharma Says Its Bankruptcy Deal Is Fairest to Creditors... Student Loans and Bankruptcy: What to Know...more
It seems to be a common misunderstanding, even among lawyers who are not bankruptcy lawyers, that litigation in federal bankruptcy court consists largely or even exclusively of disputes about the avoidance of transactions as...more
In Kaye v. Blue Bell Creameries, Inc. (In re BFW Liquidation, LLC), 899 F.3d 1178 (11th Cir. 2018), the U.S. Court of Appeals for the Eleventh Circuit broadened the scope of section 547(c)(4) of the Bankruptcy Code’s...more
The Eleventh Circuit, in In re BFW Liquidation, LLC., Case No. 17-13588, 2018 WL 3850101 (11th Cir. Aug. 14, 2018), reversed the Bankruptcy Court’s decision on direct appeal, holding that the new value defense to preferences...more
• In its recent decision in William S. Kaye, Trustee of the BFW Liquidating Trust v. Blue Bell Creameries, Inc. (In re BFW Liquidation, LLC), the U.S. Court of Appeals for the Eleventh Circuit held that liability for a...more
Trying to explain the primary purpose of Section 547 of the Bankruptcy Code to a client that just received a demand letter or complaint to avoid and recover preferential transfers can be a tough sell. Although the Section’s...more
Preference Claims: Elements: A preference is a transfer of property of a bankruptcy debtor that (1) was to or for the benefit of a creditor; (2) was on account of an antecedent debt; (3) was made while the debtor was...more
The United States Bankruptcy Court for the District of Delaware has finally clarified that the administrative expense claim for goods delivered post-bankruptcy filing may be set off – dollar for dollar – to reduce any open...more
The Bankruptcy Code permits a bankruptcy trustee to compel return of a payment made to a creditor within 90 days before a bankruptcy petition. 11 U.S.C. § 547(b)(4)(A). The justification for compelling the return of...more
The 10th U.S. Circuit Court of Appeals issued an important preference decision on August 10, 2015. What You Need to Know - Payments to creditors arising from a recent, single business transaction can be protected by...more