News & Analysis as of

Vendors Commercial Bankruptcy

Lowenstein Sandler LLP

Critical Vendor Payments Are No Sure Thing in the Ninth Circuit

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As many in the trade are well aware, Chapter 11 debtors frequently seek bankruptcy court approval to pay the prepetition claims of vendors the debtor has deemed critical to the continued operation of its business and success...more

Troutman Pepper

Who Is the Claims Agent and What Type of Information Can I Obtain on Their Website? - Creditor’s Rights Toolkit

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Troutman Pepper's Creditor’s Rights Toolkit is a series that provides practical insights to help creditors confront the challenges of commercial bankruptcy. A claims agent is a third party retained by the debtor to take on...more

Cole Schotz

Top Considerations for Vendors Dealing with Distressed Companies

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As of March 2023, commercial chapter 11 filings were up 79% compared to the same period of 2022, which includes a number of large retailers. The first quarter of 2023 saw the highest number of corporate bankruptcy filings in...more

Husch Blackwell LLP

Retail Apocalypse Part II? What Trade Creditors and Landlords Can Do To Protect Themselves

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At the outset of the Covid-19 pandemic, some commentators were preparing for a mass extinction event in the retail industry, characterized by hundreds of brick-and-mortar store closings, massive job losses, and numerous...more

Lowenstein Sandler LLP

Do Not Take Consignments Lightly

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While things worked out for vendors who did not file a UCC-1 in the Sports Authority Chapter 11, you may not be so lucky. Never assume that it is not necessary to properly perfect a consignment arrangement by filing a...more

Mayer Brown

Protecting Against Vendor Bankruptcy in Service and License Agreements

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When one of your key technology customers or vendors files for bankruptcy, what is the impact on your company? And what can your company do to mitigate the impact? Join Mayer Brown counsel Monique Mulcare and partners Richard...more

Arnall Golden Gregory LLP

Delaware Bankruptcy Court Rules That “Critical Vendor” Status Does Not Insulate a Creditor From Preference Claims

In what may be a pivotal ruling on the issue nationwide, a bankruptcy court in the influential District of Delaware has ruled that obtaining status as a so-called “critical vendor” in a commercial Chapter 11 case does not...more

Dorsey & Whitney LLP

Paper Source Bankruptcy Offers Lessons for Vendors Playing Their Cards

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On March 2, 2021, stationery and gift retailer Paper Source filed for chapter 11 bankruptcy, stating in court filings that effects of the COVID-19 pandemic damaged its finances and operations. Paper Source stated that in...more

Lowenstein Sandler LLP

Preference Defense In the Wake Of The Pandemic: A Primer

Nothing is more frustrating to a trade creditor holding a large unpaid balance owed by a debtor in bankruptcy than the risk that payments the trade creditor received before the debtor filed bankruptcy may be clawed back by...more

White and Williams LLP

COVID-19 Pandemic Preference Amendments to Bankruptcy Code Benefiting Vendors, Customers, Commercial Landlords and Tenants

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Over the last three months, Congress has passed major pieces of legislation primarily in response to the COVID-19 pandemic, including the Consolidated Appropriations Act of 2021 (CAA), which was signed into law on December...more

Obermayer Rebmann Maxwell & Hippel LLP

Letters Of Credit: Tool or Trap for Trade Vendors Dealing With Customers at Risk for Bankruptcy

The impact of the internet on brick-and-mortar retail, compounded by the economic devastation of the COVID-19 crisis, has created an unpredictable environment for trade vendors and service providers amid an uptick in...more

Greenberg Glusker LLP

Lessons for Health, Beauty & Wellness Companies [Part 2]: What Options Exist for a Vendor During Bankruptcy

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In this short, three-part video series, Greenberg Glusker Partners Andrew Apfelberg and Brian Davidoff discuss important financial considerations for health, beauty and wellness companies in the wake of a pandemic. Part two...more

Burr & Forman

Keep Your Friends Close, but Keep Your Critical Vendors Closer

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The Seventh Circuit Court of Appeals’s 2004 decision in Kmart is the most frequently cited case on critical-vendor motions. In Kmart, the Seventh Circuit, in an opinion authored by Hon. Frank Easterbrook, affirmed a district...more

Dechert LLP

Are Critical Vendors Insulated from Preference Actions?

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No, says the Delaware Bankruptcy Court in In re Maxus Energy Corp. In Maxus, the defendant, Vista Analytical Laboratory, Inc. (“Vista” or the “Defendant”), a designated critical vendor, sought summary judgement dismissing the...more

Troutman Pepper

Restructuring In The Time Of Coronavirus

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An increasing number of businesses — even those that have traditionally been financially and operationally sound — are now experiencing unanticipated revenue losses as a result of the coronavirus pandemic. Companies may find...more

Lowenstein Sandler LLP

How the bankruptcy system needs to change

Successful Chapter 11s for retailers have become few and far between. Sears, Toys "R" Us, Barneys New York, Forever 21, Coldwater Creek, Fred's, Fairway and A&P are just a few examples of recent retail disasters... ...more

BCLP

Avoid a Catastrophic Loss From a Customer’s Bankruptcy - Five Tips

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One day, you get a notice in the mail that an important customer has filed chapter 11. Your customer recently paid $250,000 on invoices that were delinquent for several months and still owes you $500,000....more

Foley & Lardner LLP

Not All Creditors Are Created Equal: Critical Vendors and Bankruptcy

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Recent economic indicators suggest that the manufacturing industry in the United States has contracted and that the economy may be headed towards recession. Such news is cause for concern for both healthy and struggling...more

Buchalter

Sellers and Consignors Beware? The Rights of Sellers and Consignors of Apparel and Other Goods in Bankruptcy: Some Questions and...

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Numerous published reports indicate that Barney’s (which previously filed for bankruptcy in 1996) has retained bankruptcy counsel and financial advisors in preparation for a potential bankruptcy filing which, according to...more

Buchalter

Consignment, the UCC, and You – Protecting Your Goods and Their Proceeds

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In a consignment distribution model, a third party Warehouse (the consignee) takes possession of goods on behalf of a Vendor (the consignor) for sale to Customers. Title passes directly from the Vendor to the Customer, and...more

Farrell Fritz, P.C.

When big retailers go bankrupt - Long Island landlords, vendors and others are impacted

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Farrell Fritz Attorney Patrick Collins was quoted in this Long Island Business News Article. The parade of retailers filing for bankruptcy marches on as consumer shopping habits continue to evolve and e-commerce keeps...more

Obermayer Rebmann Maxwell & Hippel LLP

The Big Problem With Small Preferences: The Inconsistent Application of the Small-Dollar Venue Exception Creates Opportunities for...

Vendors who sell goods to troubled businesses are often shocked when they are later sued by the debtor, a creditors’ committee or a trustee for the avoidance and recovery of preferential transfers. For the benefit of the...more

Fox Rothschild LLP

Dear Preference Target – 11th Cir. Says New Value Need Not Remain Unpaid

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In an excellent decision for preference targets, the Eleventh Circuit recently held in the case of Kaye v. Blue Bell Creameries, Inc. (In re BFW Liquidation, LLC) that the new value defense, under Section 547(c)(4), does not...more

Shumaker, Loop & Kendrick, LLP

Chapter 15: Delaware Court Sends U.S. Creditor Packing … to Italy

In the Chapter 15 proceeding of Energy Coal S.p.A., the Delaware Bankruptcy Court required a U.S. creditor to recover its claim in Italy....more

Jones Day

To Have and to Hold: Third Circuit Rules That Physical Possession of Goods Is Required Under Section 503(b)(9) of the Bankruptcy...

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Since its enactment as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, section 503(b)(9) of the Bankruptcy Code has provided an important safety net for creditors selling goods to financially...more

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