The “Catch-22” of Preference Law
Kasey Ingram and Rocco Debitetto on Bankruptcy and Compliance
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What is the status of the Avon bankruptcy? Avon Products Inc., a U.S.-based holding company that owns the Avon brand outside the United States, filed for Chapter 11 bankruptcy protection on August 14, 2024. The filing...more
To encourage vendors and other creditors to continue doing business with financially distressed entities, the Bankruptcy Code includes various defenses to litigation brought by a bankruptcy trustee or chapter 11...more
In In re Pack Liquidating, LLC, 2024 WL 409830 (Bankr. D. Del. Feb. 2, 2024), the U.S. Bankruptcy Court for the District of Delaware ruled that, in accordance with Third Circuit precedent, the Bankruptcy Code, rather than...more
The Bankruptcy Code provides that, in chapter 11 cases where the court does not find "cause" for the appointment of a trustee, the court "shall" appoint an examiner, upon a request from the Office of the U.S. Trustee (the...more
One year ago, we wrote that 2022 would be remembered in the corporate bankruptcy world for the "crypto winter" that descended in November 2022 with the spectacular collapse of FTX Trading Ltd., Alameda Research, and...more
A powerful tool afforded to a bankruptcy trustee or a chapter 11 debtor-in-possession ("DIP") is the power to recover pre-bankruptcy transfers that are avoidable under federal bankruptcy law (or sometimes state law) because...more
Introduction - The United States Trustee Program is part of the United States Department of Justice and oversees the administration of bankruptcy cases, including oversight of panel trustees. When a bankruptcy court...more
In most cases seeking recognition of a foreign bankruptcy proceeding in the United States under chapter 15 of the Bankruptcy Code, the foreign debtor's "foreign representative" has been appointed by the foreign court or...more
Bankruptcy trustees and chapter 11 debtors-in-possession ("DIPs") frequently seek to avoid fraudulent transfers and obligations under section 544(b) of the Bankruptcy Code and state fraudulent transfer or other applicable...more
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
A bankruptcy trustee's ability to avoid and recover pre-bankruptcy preferential transfers is essential to preserving or augmenting the estate for the benefit of all stakeholders. In 2019, however, the Bankruptcy Code was...more
On April 17, 2023, the Fifth Circuit Court of Appeals, in Matter of RE Palm Springs II, L.L.C., 2023 WL 2966520 (5th Cir. April 17, 2023), held that a senior lender who uses economic leverage and asserts its legal rights to...more
The Supreme Court’s April 19, 2023, decision in MOAC Mall Holdings, LLC v. Transform Holdco, LLC, 598 U.S.___, ___S. Ct.___, 2023 WL 2992693 (April 19, 2023) resolved an existing circuit split by holding that section...more
The ability of a bankruptcy trustee or chapter 11 debtor-in-possession ("DIP") to assume, assume and assign, or reject executory contracts and unexpired leases is an important tool designed to promote a "fresh start" for...more
Whether a contract is "executory" such that it can be assumed, rejected, or assigned in bankruptcy is a question infrequently addressed by the circuit courts of appeals. The U.S. Court of Appeals for the Fifth Circuit...more
Vital Pharmaceuticals, Inc., the company behind Bang Energy drinks, along with certain affiliated entities including Quash Seltzer, LLC, filed for Chapter 11 bankruptcy protection on October 10, 2022 in the Southern District...more
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 the debtor’s assets outside the ordinary...more
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 the debtor's assets outside the ordinary...more
Unlike professionals retained in a chapter 11 case by trustees, debtors, or official committees, the Bankruptcy Code provides little guidance regarding the appointment of a representative for "future claimants" in a chapter...more
Key Takeaways - The U.S. Bankruptcy Court for the Eastern District of Virginia recently published a critical opinion in a high profile dispute between Toys “R” Us’ creditors and some of the officers and directors of the...more
Following a July 6, 2022 memorandum opinion from the United States Bankruptcy Court for the District of Delaware, lenders and noteholders seeking to preserve the priority of their liens must make any desired subordination...more
FIFTH CIRCUIT WEIGHS IN ON BANKRUPTCY ASSET SALES FREE AND CLEAR OF LEASEHOLD INTERESTS - The ability of a trustee or chapter 11 debtor-in-possession (“DIP”) to sell bankruptcy estate assets “free and clear” of competing...more
The ability of a trustee or chapter 11 debtor-in-possession ("DIP") to sell bankruptcy estate assets "free and clear" of competing interests in the property has long been recognized as one of the most important advantages of...more
The ability of a bankruptcy trustee or chapter 11 debtor-in-possession ("DIP") to avoid fraudulent transfers is an important tool to promote the bankruptcy policies of equality of distribution among creditors and maximizing...more
On March 14, 2022, Senator Chuck Grassley (R-IA) introduced proposed legislation that—if enacted—would make permanent the $7.5 million debt limit applicable to debtors under subchapter V of chapter 11 of the Bankruptcy Code...more