News & Analysis as of

Debtors Creditors

In Bankruptcy, a Lease Isn't Always a Lease

by Ward and Smith, P.A. on

In In re Price, the United States Bankruptcy Court for the Eastern District of North Carolina recently explored the difference between a “true” lease of personal property and “disguised” financing. Creditors should take heed...more

Non-Consensual Third-Party Releases in Chapter 11 Plans: a Recent Decision

A recent decision of the United States Bankruptcy Court for the Southern District of New York provides important guidance on the limits of nonconsensual third-party releases in the Second Circuit. SunEdison, Inc. sought...more

Amendments to Chapter 12 make it easier for a family farmer to reorganize

by Thompson Coburn LLP on

In a rare bipartisan moment, Congress overwhelmingly passed and the President signed into law on October 25 the Family Farmer Bankruptcy Clarification Act of 2017. This legislation makes it easier for family farmers to...more

Second Circuit Addresses Key Chapter 11 Plan Issue

It is a unique characteristic of debt restructuring under Chapter 11 of the Bankruptcy Code that a majority of a class of creditors can accept a modification of the terms of the debts owed to the class members, as provided in...more

Waivers of Jury Trials and Lawsuits in Bankruptcy Cases

Figuring out when a pre-petition waiver of a jury trial will be respected in lawsuits brought in bankruptcy cases can be tricky. In a recent case, In re D.I.T., Inc., 2017 Bankr. LEXIS 3386 (Bankr. S.D. Fla. Oct. 2, 2017), a...more

In Preference Suit, Seventh Circuit Holds That Debtor’s Assignment of Contractual Rights Does Not Negate Creditor’s New Value...

In Levin v. Verizon Bus. Global, LLC (In re OneStar Long Distance, Inc.), 2017 U.S. App. LEXIS 18374 (7th Cir. Sept. 22, 2017), the Seventh Circuit recently addressed a situation where a debtor sought to reduce a creditor’s...more

Bankruptcy Court Holds That “Economic Waste” Doctrine, As Adopted In Wisconsin, Prevented Owner From Recovering Costs To Repair...

by Pepper Hamilton LLP on

WTE-S&S AG Enters., LLC v. GHD, Inc., 2017 Bankr. LEXIS 2343 (Bankr. N. D. Ill. August 18, 2017) - This breach of contract dispute arises out of a contract to design and build a cow-manure digester on a farm in Wisconsin. ...more

Cramdown Interest Rate Best Set Based on Market Rates

by Robinson & Cole LLP on

The Bankruptcy Code permits cramdown of a secured creditor but requires that the secured creditor receive deferred cash payments at least equal to the value of its collateral. This means that installment payments to the...more

Restructuring and Insolvency Bulletin Issue 2 - 2017: An update on COMI shifting to take advantage of the best insolvency tools to...

by Dechert LLP on

The EU has taken aim at fraudulent or abusive forum shopping in the Recast Insolvency Regulation, acknowledging the potential for misuse by debtors seeking to take advantage of more flexible insolvency processes available in...more

Failure To Comply With Plan Technicality Causes US Securities Law Violation

by Dechert LLP on

Section 5 of the Securities Act of 1933 prohibits the sale of a security unless a registration statement is in effect. This prohibition on the sale of unregistered securities does not apply to exempt transactions. One such...more

US Bankruptcy Filing Limitations - How Far Can You Go?

by Dechert LLP on

In order to file for bankruptcy, a corporate entity must be legally authorized to do so. Whether the bankruptcy petition has been duly authorized is governed by state law and often depends on the entity’s governance...more

Ninth Circuit Reverses Course on Measure of Collateral Value in Cramdown Confirmation of Chapter 11 Plan

by Jones Day on

In First Southern Nat’l Bank v. Sunnyslope Hous. LP (In re Sunnyslope Hous. LP), 2017 BL 216965 (9th Cir. June 23, 2017), the U.S. Court of Appeals for the Ninth Circuit held en banc that, in determining whether a chapter 11...more

Debtor’s Failure to Disclose No Longer Deadly in Eleventh Circuit

by Perkins Coie on

Employers and other defendants suffered a setback recently. Most large companies have been sued by an employee who failed to disclose the lawsuit or cause of action in their individual bankruptcy case. For many years, the...more

Some Upside To Being Upside-Down: The Fifth Circuit Provides Undersecured Creditors An Additional Front On which To Contest...

by Cole Schotz on

Undersecured creditors face unique challenges because they are neither fully secured nor fully unsecured. Beyond the obviously undesirable issue of being upside-down on their deal, undersecured creditors often are exposed to...more

Dear Debtor, Three Strikes And You’re Outta Here!

by Fox Rothschild LLP on

When an individual files for bankruptcy protection, he/she is entitled to certain wonderful benefits. For example, a Chapter 13 bankruptcy filing will stop (at least temporarily) a home foreclosure or car repossession and...more

The Pre-Action Protocol for Debt Claims

by Dentons on

The Pre-Action Protocol for Debt Claims comes into force on 1 October 2017. This note deals with the key elements to be aware of. Applicability - While the Protocol is named the Pre-Action Protocol for Debt Claims the...more

Best in Law: Which Interest Rate Applies in Bankruptcy? With Low Federal Rates, It Matters, BB&K Attorney Thomas Eastmond Writes...

by Best Best & Krieger LLP on

While the question of what interest rate applies to a claim in bankruptcy might seem, at first glance, to be straightforward — it is not. Depending on the circumstances, a creditor might be entitled to no interest at all,...more

The Section 363 Sale Process: Buying Assets from a Bankrupt Company

by Ward and Smith, P.A. on

Businesses struggle and bankruptcies are filed for a number of reasons, regardless of the economic climate. While unfortunate, this provides opportunities for others to purchase assets of distressed companies through the...more

The Devil's Dictionary of Bankruptcy Terms: Use of Cash Collateral

by Polsinelli on

The "Devil's Dictionary" is a quick-reference guide for commercial lenders and other restructuring professionals. In this series, we highlight many of the buzz words found in the Dictionary and used in today's bankruptcy...more

Prescription: A discussion of without prejudice acknowledgments in South Africa

by Dentons on

Extinctive prescription is a means of rendering various types of obligations and claims as extinguished or unenforceable by the effluxion of time. In this article, we provide a brief overview on without prejudice statements...more

Eleventh Circuit Moves Toward Bright Line Rule That Debtors Cannot Retain Real Property Post- Discharge Without Reaffirming the...

by Burr & Forman on

Last year, Burr & Forman lawyers won a decisive victory in the Eleventh Circuit, in the case of In re Failla, 838 F.3d 1170 (11th Cir. 2016). In Failla, the Eleventh Circuit held that a debtor who files a statement of...more

Section 553 of the Bankruptcy Code Preserves Rather Than Creates Setoff Rights

by Jones Day on

In Feltman v. Noor Staffing Grp., LLC (In re Corp. Res. Servs. Inc.), 564 B.R. 196 (Bankr. S.D.N.Y. 2017), the bankruptcy court considered whether section 553 of the Bankruptcy Code creates a right of setoff when no such...more

Partial Worthlessness

by Alston & Bird on

While we wait to learn whether the Section 385 regulations will be withdrawn or changed, it is useful to recall some of the basic rules of dealing with debt. Even related-party debt can sometimes run into payment troubles....more

Success Fees - Technical Arguments Fail In The Face Of Broad Definitions

by Fox Rothschild LLP on

In a decision signed July 26, 2017 in the Nephrogenex bankruptcy (case 16-11074), Judge Gross of the Delaware Bankruptcy Court approved of the application of the Debtor’s investment banker for a success fee over the objection...more

Delaware Clarifies “Received” For Valuable 503(b)(9) Claims

by Cole Schotz on

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

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