News & Analysis as of

Chapter 11 Setoff Rights

Jones Day

Business Restructuring Review Vol. 23 No. 6 - November–December 2024

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Hertz: Third Circuit Weighs In On Make-Whole Premiums And The “Solvent-debtor Exception” In Chapter 11 Cases - A handful of recent high-profile court rulings have considered whether a chapter 11 debtor is obligated to pay...more

Troutman Pepper Locke

Can I Net Amounts Owed to the Debtor Against Amounts Owed to Me? - Creditor’s Rights Toolkit

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There are two similar but distinct mechanisms through which a creditor might net amounts owed to the debtor against amounts owed by the debtor — setoff and recoupment. Understanding the distinction between them, and how...more

Jones Day

New York Bankruptcy Court: Setoff and Unjust Enrichment Cannot Be Asserted as Affirmative Defenses in Bankruptcy Avoidance...

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In a 2021 ruling, the U.S. Court of Appeals for the Second Circuit revived nearly 100 lawsuits seeking to recover fraudulent transfers made as part of the Madoff Ponzi scheme. In one of the latest chapters in that resurrected...more

Jenner & Block

Recent Developments in Bankruptcy Law, January 2022

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1. AUTOMATIC STAY - 1.1 Covered Activities - Taggart v. Lorenzen standard applies to stay violation in a corporate case. The debtor sold assets prepetition. After the petition date, the buyer demanded payment of certain...more

Jones Day

Business Restructuring Review | July-August 2021

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Chapter 15 Update: U.S. Bankruptcy Court Refuses To Enforce Order Approving Indonesian Debt Restructuring Plan Due To Third-party Releases - Cross-border bankruptcy cases filed in the U.S. under chapter 15 of the...more

Jones Day

First Impressions: Third Circuit Scuttles Triangular Setoff in Bankruptcy

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The ability of a creditor to exercise its contractual, common law or statutory rights under non-bankruptcy law to set off amounts owed to a debtor in bankruptcy against the debtor's obligations to the creditor gives...more

Bailey & Glasser, LLP

Third Circuit Signals Possible Limitations On Setoff Rights

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Parties to corporate transactions often rely on contractual setoff rights to help ensure that they can be paid or at least limit the amounts lost if the counterparty fails to pay.  While the Bankruptcy Code generally protects...more

Lowenstein Sandler LLP

Third Circuit Eschews Setoff Creativity In Favor Of A Simple Mutuality Test

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On March 19, 2021, the Court of Appeals for the Third Circuit issued its decision in In re Orexigen Therapeutics, Inc., 2021 WL 1046485 (3rd Cir. Mar. 19, 2021), affirming lower courts’ decisions rejecting “triangular setoff”...more

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