Under § 506(a)(1) of the Bankruptcy Code, a secured creditor’s claim is secured only to the extent of the collateral’s value. Any amount over that value is bifurcated into a separate unsecured claim. Critically, if a...more
The general rule in bankruptcy is that administrative expenses, generally defined as the necessary costs and expenses of preserving property of the estate, are paid from the debtor's bankruptcy estate. Originally published...more
With the explosion of private credit over the last decade, it felt almost inevitable that this past year, one marked by prolonged anticipation of a global economic slowdown, would experience its share of restructuring...more
The IRS on July 23 issued final regulations (“Final Rules”) implementing the Internal Revenue Code section 506 requirement that an entity notify the IRS of its intent to operate as a Code section 501(c)(4) social welfare...more
In SummitBridge Nat’l Invs. III, LLC v. Faison, 915 F.3d 288 (4th Cir. 2019), the U.S. Court of Appeals for the Fourth Circuit ruled that an unsecured or undersecured creditor may include postpetition attorney’s fees and...more
It is a well-established principle of bankruptcy law that claims generally crystallize as of the bankruptcy petition date. Of course, section 506(b) of the bankruptcy code allows over-secured, secured creditors to recover...more
Lawyers who represent debtors in bankruptcy cases, supported by rulings from many bankruptcy judges, have long taken the position that creditors with unsecured claims whose agreements with their debtors provide for payment of...more
In In re Houston Regional Sports Network, L.P., 886 F.3d 523 (5th Cir. 2018), the U.S. Court of Appeals for the Fifth Circuit held that bankruptcy courts have flexibility in selecting the date on which to value collateral,...more
The Fifth Circuit in Houston Sportsnet Finance, L.L.C. v. Houston Astros, L.L.C. (In re Houston Regional Sports Network, L.P.), 886 F.3d 523 (5th Cir. 2018), recently held that a bankruptcy court is not required to use either...more
Just about every year amendments are made to the rules that govern how bankruptcy cases are managed — the Federal Rules of Bankruptcy Procedure. The amendments address issues identified by an Advisory Committee made up of...more
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
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
The ability of a trustee or chapter 11 debtor in possession ("DIP") to sell bankruptcy estate assets "free and clear" of liens on the property under section 363(f) of the Bankruptcy Code has long been recognized as one of the...more
Organizations that claim federal tax-exempt status under Section 501(c)(4) must comply with new procedures for notifying the IRS of their intent to operate under Section 501(c)(4), or face potential penalties. The IRS has...more
The Protecting Americans from Tax Hikes (“PATH”) Act of 2015, enacted in December 2015, requires organizations to notify the IRS if they desire to operate under Section 501(c)(4) of the Internal Revenue Code (“Code”). (Only...more
The Issue and Background - Debtors David Caulkett and Edelmiro Toledo-Cardona (“Debtors”) each filed for Chapter 7 bankruptcy relief with “underwater” junior mortgages held by Bank of America, N.A. (“Bank”). In other...more
Reaffirming its 1992 decision in Dewsnup v. Timm, on June 1, 2015, the U.S. Supreme Court in Bank of America v. Caulkett, No. 13-1421, once again ruled that a chapter 7 debtor may not void a junior lien under Bankruptcy Code...more
The U.S. Supreme Court held that a secured creditor in a chapter 7 bankruptcy case is protected from having its lien “stripped off” even if the collateral securing its claim is worth less than the claims asserted by a senior...more
On March 24th, the Supreme Court heard oral argument on the consolidated appeals of two decisions from the Eleventh Circuit Court of Appeals, Bank of America v. Caulkett and Bank of America v. Toledo-Cardona. The appeals...more
Section 506(b) of the Bankruptcy Code allows secured creditors to receive post-bankruptcy or postpetition interest, also known as pendency interest, when the value of their collateral exceeds the amount they are owed. ...more
As most mortgage lenders know by now, on May 11, 2012, the Eleventh Circuit issued an unpublished decision in McNeal v. GMAC Mortgage, LLC (In re McNeal) , 477 Fed. App’x 562, holding that a chapter 7 debtor can “strip off”...more