Changes in culture and technology have been reshaping the way Americans acquire and consume goods and services for a generation.  Indeed, long before the coronavirus, insolvency professionals and industry experts understood that the retail landscape was experiencing a dramatic transformation. ...

COVID-19 has sent the price of oil per barrel in a downward spiral. The plummet in business travel, cruises, vacations, weekend getaways, and non-essential travel have all led to a decreased demand for oil. The resultant price drop has left...

COVID-19 is taking an alarming and unfortunate toll on our country’s population. Each day, we collectively face daunting health risks, and the economic cost to individuals and businesses alike has already been, and will continue to be, staggering. Accordingly, more...

State governments can be creditors of individuals, businesses and institutions that are debtors in bankruptcy in a variety of ways, most notably as tax and fine collectors but also as lenders.  They can also be debtors of debtors, in their...

Do the directors who oversaw the fraudulent conveyance of a corporation’s assets face direct liability for it?  Not unless the entities were shams and the directors exerted total dominion and control, according to Commercial Division Justice Andrew Borrok’s recent decision...

In what will come as a surprise to absolutely no one, we are already beginning to see the nascent signs of what may become significant distress in one of the industries likely to be most drastically impacted by the coronavirus...

Debtors in chapter 11 cases are required to make quarterly payments to the United States Trustee’s Office.  These fees support the UST Program that serves in all districts but those in two states.[i]  Quarterly fees must be paid until cases...

The importance of clarity in drafting agreements can never be understated. And while there are strategies available to spouses of business owners to help protect a family in bankruptcy, it is imperative to properly plan and draft to receive such...

We reported on the adoption of the Small Business Reorganization Act of 2019[1] (“SBRA”), with its 180-day runway to effectiveness, at the time of its adoption last year.[2]  The wait is over, and SBRA is springing to life. Progressive Solutions, Inc....

When there are large numbers of substantial individual tort claims against a debtor, potentially involving claimants unknowable to the debtor who themselves may not know they have a claim, the bankruptcy process faces special problems.  One objective of bankruptcy is...

There has been considerable progress towards resolution in two of the largest bankruptcy cases pending in the United States: the Commonwealth of Puerto Rico and the California utility, Pacific Gas & Electric.[1]   Several months ago, we reported on the framework of...

An appeal from a bankruptcy court’s final judgment must be filed within 14 days of when an appealable order is entered on the docket.  Parties should not delay past the 14 days even if, for instance, the bankruptcy court must...

We have noodled on the impact that the Supreme Court’s decision in Merit Management Group, LP v. FTI Consulting, Inc.,[1] which held that the safe harbor provided in Section 546(e) of the Bankruptcy Code does not apply when the financial...

When a debtor files for bankruptcy, the Bankruptcy Code provides for an automatic stay of almost all proceedings to recover property from the debtor.  See 11 U.S.C. § 362(a).  A party in interest can seek an order exempting it from...

Last month, New York enacted the Uniform Voidable Transactions Act (“UVTA”)[1], which seeks to modernize the state’s fraudulent conveyance law.  Since its introduction by the Uniform Law Commission in 2014, the UVTA has now been adopted by 21 states.[2]  The UVTA...

On December 19, the Court of Appeals for the Third Circuit became the first federal circuit court of appeals to hold that a bankruptcy court may confirm a plan containing nonconsensual third-party releases without exceeding the constitutional limits on its...

The U.S. Bankruptcy Code allows debtors to stay in control of their businesses in chapter 11.  But the Code also empowers bankruptcy judges to replace a debtor’s management in certain circumstances with an outside trustee.  This will happen if either...

Section 303 of the Bankruptcy Code allows creditors to initiate an involuntary bankruptcy case against a debtor. The petition initiating the case must be filed by creditors holding claims aggregating to at least $10,000,[1] and those claims must not be...

We recently reported on a decision of the United States Court of Appeals for the Third Circuit in favor of a creditor that seized a debtor’s property pre-petition.   In In re Denby-Peterson, the Third Circuit sided with the minority of...

Whether because of, or in spite of, the proliferating case law it is hard to say, but the issues in, underlying and surrounding third-party releases in Chapter 11 plans just continue to arise with incessant regularity, albeit without a marked...

In our November 13 post entitled “500 Years and Counting: 16th Century Legal Principles Resonate in Modern Fraudulent Transfer Jurisprudence,” note 4 states in part: On May 8, 2019, the New York Legislature enacted the [Uniform Voidable Transactions Act] to replace...

Ultra Petroleum entered bankruptcy in significant financial distress, but then – thanks to a spike in oil prices – the debtor’s fortunes changed almost literally overnight.  It is generally accepted that a solvent debtor must pay its creditors their complete...

A recent decision in Delaware discussed the Barton doctrine and the application of the automatic stay in chapter 15 cases.  McKillen v. Wallace (In re Ir. Bank Resolution Corp.), No. 18-1797, 2019 U.S. Dist. LEXIS 166153 (D. Del. Sept. 27,...

Anglo-American legislators and judges have been dealing with the treatment of debtors’ transactions that adversely affect their creditors at least since the Sixteenth Century.  In 1571, Parliament enacted the famous statute with the short title “An act against fraudulent deeds,...

In July 2016, Joy Denby-Peterson purchased a Chevrolet Corvette.  When she defaulted on one of her car payments a few months later, the Corvette was repossessed by her lender.  Denby-Peterson then filed a voluntary petition under Chapter 13 of the...

The Bankruptcy Code gives a trustee powers to avoid certain pre-bankruptcy transfers of the debtor’s property to other entities. For example, a trustee can avoid transfers made with the intent to impair the ability of creditors to collect on their...

Judge Martin Glenn last week issued a decision in two related chapter 15 cases, In re Foreign Econ. Indus. Bank Ltd. “Vneshprombank” Ltd., No. 16-13534, and In re Larisa Markus, No. 19-10096, 2019 Bankr. LEXIS 3203 (Bankr. S.D.N.Y. Oct. 8, 2019). The...

In 1930, Clarence Bennett’s wealthy uncle died. He left behind shares in Berry Holding Company ("BHC") that were subdivided into three groups. Bennett was the beneficiary of dividends paid out of one of these groups and, for many years, received his share...

On August 23, 2019, President Trump signed H.R. 3311 into law.  The goal of the Small Business Reorganization Act is to facilitate reorganization among small businesses.  One of my fellow bloggers has provided a summary that you can read here. ...

Section 548 of the Bankruptcy Code enables trustees to avoid certain pre-bankruptcy transfers of “an interest of the debtor in property,” where the transfer was intended to defraud creditors or where the transfer was made while the debtor was insolvent...

Consider these facts.  A debtor in bankruptcy sued two parties for breach of contract.  The debtor assigned its rights and interests in the cause of action to another entity.  The defendants moved to dismiss the lawsuit, arguing that the court...

In the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“2005 Act”), Congress amended the Bankruptcy Code and Title 28 of the U.S. Code to provide special rules and procedures for “small business debtors.”[1]  The small business provisions of...

A “little bit of a crisis” was averted last week in the Chapter 11 bankruptcy case of St. Christopher’s Hospital for Children, a Philadelphia-area hospital with ties to Hahnemann University Hospital, which is also a Chapter 11 debtor.[1]  On Tuesday,...

Chapter 15 of the Bankruptcy Code, added in 2005, provides a route for debtors to obtain US recognition of their insolvency proceedings in other countries.  A foreign proceeding can be recognized under chapter 15 as either a “foreign main proceeding”...

We previously discussed Bankruptcy Judge Martin Glenn’s analysis of the Wagoner Rule in the Feltman v. Kossoff & Kossoff LLP (In re TS Empl., Inc.) case.[1]  The bankruptcy trustee (the “Trustee”) had asserted a fraud claim against the debtor’s outside...

A bankruptcy trustee exercising her or his avoidance powers under Chapter 5 of the Bankruptcy Code may seek to recover the avoidably transferred property (or its value) from “the initial transferee,” “the entity for whose benefit such transfer was made”...

Here’s an update on recent political, social, and economic developments in Venezuela.[i]  From our perspective as a blog focused on insolvency and restructuring topics, the upshot of what’s been taking place in Venezuela is that the chances of a debt...

We’ve focused a lot on third-party releases lately, as bankruptcy courts across the country continue to evaluate whether and under what circumstances they are permissible.  But, as a recent opinion of the United States Court of Appeals for the Fifth...

Bankruptcy Courts are divided on the permissibility of third-party releases.  In some circuits, the proponent of a plan can win approval of third-party release provisions in “rare” or “exceptional” circumstances.  But, some commentators have started to question just how rare...

Our May 22 post reported on the Supreme Court’s May 20 decision in Mission Product Holdings, Inc. v. Tempnology, LLC,[1] an 8-1 decision holding that the rejection of a trademark license in which the debtor is the licensor does not...

New York Bankruptcy Judge Sean Lean recently denied a Rule 2004 request because the movant sought documents for use in an unrelated litigation.  In re Cambridge Analytica LLC, No. 18-11500, 2019 Bankr. LEXIS 1824 (Bankr. S.D.N.Y. Jun. 14, 2019).  Judge...

Delaware Bankruptcy Judge Brendan Shannon granted mechanic’s lien claimants $1.6 million for making a substantial contribution in a case by “demonstrably and materially facilitating the process of reorganization.”  In re M & G USA Corp., No. 17-12307, 2019 Bankr. LEXIS 1398...

The Financial Oversight and Management Board for Puerto Rico (Oversight Board) announced Sunday that it had reached an agreement with bondholders regarding the terms of a plan of adjustment that would resolve $35 billion worth claims against the Commonwealth of...

Successful bankruptcy cases typically end with a court order releasing a debtor from liability for most pre-bankruptcy debts.  This order, generally known as a “discharge order,” prohibits the debtor’s creditors from trying to collect on those now-discharged debts.  See 11...

Last year, we discussed a decision by Judge Sean Lane of the United States Bankruptcy Court for the Southern District of New York concerning section 109(a) of the Bankruptcy Code.[1]  In a recent cross-border case, In re PT Bakrie Telecom...

Our January 22, May 23, June 28, July 13, August 3, September 11 and October 29, 2018 and January 11, 2019 posts discussed the First Circuit’s January 12, 2018 decision in Mission Product Holdings, Inc. v. Tempnology, LLC.[1] and the...

Creditors’ recoveries often hinge on claw-back lawsuits that trustees bring under bankruptcy law and non-bankruptcy law.[1]  Trustees can file claims based on non-bankruptcy law because Bankruptcy Code section 544(b) allows them to assert claims that creditors have standing to file...