News & Analysis as of

Breach of Contract Bankruptcy Code

Morris James LLP

When Bankruptcy Meets Intellectual Property: What Every IP Holder Should Know

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Bankruptcy can disrupt even the most carefully structured business relationships, and if your company holds, licenses, or depends on intellectual property, the stakes are especially high. Understanding how bankruptcy law...more

Stark & Stark

5 Issues for Landlords During a Bankruptcy Lease Rejection

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When a commercial tenant files for bankruptcy, they have the option to assume or reject unexpired leases. A bankruptcy lease rejection is a significant action, as it communicates the debtor’s intent to hand back the space....more

Jones Day

Fifth Circuit Rules that Serta Simmons Uptier Violated Credit Agreement, Rejects Equitable Mootness as Bar to Review of Chapter 11...

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In In re Serta Simmons Bedding, LLC, 125 F.4th 555 (5th Cir. 2024), as amended, No. 23-20281 (5th Cir. Jan. 21, 2025), revised and superseded, No. 23-20181 (5th Cir. Feb. 14, 2025), reh'g denied, No. 23-20181 (5th Cir. Feb....more

DLA Piper

Fifth Circuit Rules that Serta Simmons Bedding, LLC’s 2020 Uptier Transaction Violated Pro Rata Distribution Covenant

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In a landmark ruling, the US Court of Appeals for the Fifth Circuit ruled that a June 2020 refinancing transaction (the Uptier Transaction) entered by Serta Simmons Bedding, LLC (SSB, or the Debtor) and certain of its lenders...more

Akin Gump Strauss Hauer & Feld LLP

Serta - Fifth Circuit Decision

On December 31, 2024, the U.S. Court of Appeals for the Fifth Circuit issued its long-awaited decision regarding the permissibility of the Serta Simmons Bedding (Serta) uptier liability management exercise (the 2020 Uptier)...more

Morrison & Foerster LLP

Latest Uptier Decisions in Serta and Mitel Remind Contract Language Matters

The caselaw on “uptiers” as liability management exercises (LMEs) grew by two opinions on the last day of 2024. In Serta, the Fifth Circuit reversed the bankruptcy court’s blessing of the pre-bankruptcy uptier and...more

Hendershot Cowart P.C.

Executory Contracts and Contract Rejection: What Non-Debtors Need to Know About Bankruptcy

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Bankruptcy debtors have special rights in contracts or leases where both parties have outstanding obligations, known in legal terms as “executory contracts” or “unexpired leases”. If you are doing business with a company that...more

White and Williams LLP

A Funny Thing Happened to My Ground Lease in Bankruptcy Court

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Ground leases are an important – if somewhat unusual – part of the real estate finance industry. Because they typically cover large expensive properties like Rockefeller Center and The Empire State Building, to name two, and...more

Ward and Smith, P.A.

Collection Costs of a Non-Discharged Debt Also Are Non-Discharged

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Bankruptcy offers debtors an opportunity for a "fresh start," the primary draw for many individuals seeking to unburden themselves of their debt. A bankruptcy discharge relieves a debtor of their legal obligation to repay...more

Holland & Knight LLP

The Real Estate and Corporate Restructuring Connection, Plus Retail Restructuring Trends

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The transition to online shopping, interest rate increases, labor costs, maturing debt and rising inflation have collectively taken a significant toll on the retail industry, contributing to store closures and a growing...more

Pillsbury Winthrop Shaw Pittman LLP

Not So Fast: An Option to Purchase Real Estate May Not Always Be Rejected by the Debtor in Bankruptcy

A recent bankruptcy court decision determined that a debtor cannot reject an unexercised option for the purchase of its real estate, raising a potentially significant bar to any debtor extricating itself from an under-market...more

A&O Shearman

Diamond Sports Group swings for the fences (and strikes out)

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During a U.S. bankruptcy case, can a debtor pay something less than the full contract rate provided for in a contract entered into prior to the bankruptcy while still requiring the counterparty to fully perform its...more

Hogan Lovells

Second Circuit holds that general contractor doesn’t have to be satisfied in full for real estate developer to assume and assign...

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In a recent decision, the Second Circuit held that only parties with the right to pursue a breach of contract claim under an executory contract or unexpired lease have the right to demand a cure payment in the event the...more

Fuerst Ittleman David & Joseph

Florida’s Insurers Rehabilitation and Liquidation Act: What Happens in Florida When Insurers Become Insolvent

Current state of affairs - Even before Hurricane Ian made landfall and devastated southwest Florida in September 2022, six property & casualty insurers had voluntarily declared themselves insolvent and allowed the State to...more

Tucker Arensberg, P.C.

U.S. Supreme Court Determines a Fraudulent Debt Cannot Be Discharged, Regardless of Debtor’s Culpability

Tucker Arensberg, P.C. on

In Bartenwerfer v. Buckley, 598 U.S. __ (2023), the United States Supreme Court, in a unanimous opinion authored by Justice Amy Coney Barrett, determined that a debtor could not discharge a judgment debt because the “debt...more

Patterson Belknap Webb & Tyler LLP

New SDNY Decision on Administrative Priority for Executory Contracts

To encourage parties to transact with debtors in bankruptcy, the Bankruptcy Code in corporate bankruptcies provides highest priority to “administrative expenses,” which include “the actual, necessary costs and expenses of...more

Harris Beach Murtha PLLC

Cannabis-Related Companies Can’t File Bankruptcy Until Federal Legalization

Although the use of cannabis has been legalized in approximately 39 states and the District of Columbia¹ , cannabis is still illegal federally and classified as a Schedule I drug under the Controlled Substances Act. As a...more

McGlinchey Stafford

Do I have standing to bring a declaratory judgment action? - McGlinchey’s Commercial Law Bulletin - September 7 2022

McGlinchey Stafford on

Unambiguous Contract Language- Lake Breeze Condo. Homeowner’s Ass’n v. Eastlake Ohio Developers, LLC, 11th Dist. Lake No. 2022-Ohio-3002. In this case the Eleventh Appellate District affirmed in part and reversed in...more

Moritt Hock & Hamroff LLP

Aggressive Pursuit Of Repayment Or Crossing The Line? Takeaways From The Bailey Tool Bankruptcy Case

A lender’s successful enforcement of loan documents following one or more events of default turns on a variety of factors, the most important of which is compliance with the terms of the relevant loan documents. When a lender...more

Foley & Lardner LLP

11 Key Strategies to Protect Your Company’s Supply Chain and Mitigate Risks Against Financially Distressed Customers and Suppliers

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As we pass the midpoint of 2022 and the world expresses a collective sigh of relief that the worst of the COVID-19 pandemic seems to be behind us, a perfect storm of extraordinary factors is creating conditions for financial...more

Patterson Belknap Webb & Tyler LLP

Supreme Court Agrees to Hear a Case About the Scope of the Fraud Exception to Discharge

A discharge in bankruptcy usually discharges a debtor from the debtor’s liabilities. Section 523 of the Bankruptcy Code, however, sets forth certain exceptions to this policy, including for “any debt . . . for money,...more

Vinson & Elkins LLP

In re Ultra Petroleum Corp. – Fifth Circuit: Debtors May Reject FERC-Approved Gas Transportation Agreements

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In Federal Energy Regulatory Commission v. Ultra Resources, Inc. (In re Ultra Petroleum Corp.),1 a panel of the Fifth Circuit Court of Appeals (the “Fifth Circuit Panel”) provided valuable clarity regarding a 2004 decision in...more

Proskauer Rose LLP

Nine Point Ruling Limits High Court Bankruptcy Contract Rule

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In its 2019 decision in Mission Product Holdings Inc. v. Tempnology LLC, the U.S. Supreme Court resolved a circuit split concerning the effect of contract rejection under Section 365 of the Bankruptcy Code. More specifically,...more

Dechert LLP

Thou Shall Not Interfere With Special Purpose Entities’ Contractual Obligations

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A recent decision of the New York Court of Appeals, Sutton v. Pilevsky held that federal bankruptcy law does not preempt state law tortious interference claims against non-debtors who participated in a scheme that caused a...more

Farella Braun + Martel LLP

What to Do When Commercial Leases End Up in Bankruptcy

The COVID-19 pandemic is forcing many businesses to close, leaving landlords in the lurch. The COVID-19 pandemic continues to shake up the nation’s economy. Long-standing companies such as JC Penney, J. Crew, Neiman...more

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