Bankruptcy Court Finds Arbitration Clause in Consumer Loan Contract to be Sufficient Cause to Grant Relief from Automatic Stay

In the News

Venezuela Debt Update: Recent Developments in Arbitrations that Could Impact Restructuring Efforts

October 18, 2018

Daniel A. Lowenthal

It’s hard to find something positive to write about Venezuela. Some basic facts tell the story of the misery there.

Consumer prices this year might rise one million percent. The minimum wage was increased by 3,000 percent so that seven million workers will now receive $20 a month. And many others live on just $2 to $8 a month and eat one meal a day. The poverty rate is a crushing 82 percent. Medicine is scarce.

Venezuela has the world’s largest oil reserves, but oil production this year might be the lowest since 1947. And the country suffers with a reported debt burden of $150 billion. Sanctions imposed last year by the U.S. bar its citizens from trading new debt issued by Venezuela or its state-owned oil company, Petroleos de Venezuela (“PDVSA”), and prohibit U.S. banks from buying bonds and negotiating with Venezuela.

Corruption and cronyism first under President Hugo Chavez and now President Nicolas Maduro are a fact of daily life. Starting in 1999, the country expropriated $17 billion in private assets. Multiple arbitrations against Venezuela and PDVSA followed.

The future of the country will depend on many factors, including how the legal proceedings are resolved, the ability of Venezuela to restructure its debt, and its bilateral relations with China and Russia. This post summarizes recent developments in arbitrations and litigations that could impact restructuring efforts.

One of the biggest stories involves Crystallex International Corp., a Canadian entity. In 2011, then President Hugo Chavez nationalized a gold mine in Venezuela owned by Crystallex. In 2016, Crystallex brought an arbitration against the country before the World Bank International Center for Settlement of Investment Disputes (“ICSID”) and was awarded $1.2 billion, plus $200 million in interest.

The award was confirmed in federal court in D.C., and Crystallex sought to enforce it in federal court in Delaware. In August, U.S. District Judge Leonard Stark issued a 75-page opinion that allows Crystallex to attach shares of PDV Holding (“PDV-H”), a Delaware Corporation and a subsidiary of PDVSA. PDV-H’s sole asset is its 100 percent ownership of Citgo Holding, which owns Citgo, the oil company based in Houston.

Venezuela didn’t appear in the case but PDVSA did. Judge Stark ruled that Venezuela and PDVSA were alter egos of one another based on Venezuela’s control of PDVSA. PDVSA has appealed the decision to the U.S. Court of Appeals for Third Circuit; bondholders have intervened in the case; and motions to stay enforcement of the decision have been filed. Judge Stark will hear the parties on December 20 and decide next steps.

The significant name in this case and others is Citgo. It owns three refineries in the U.S., pipelines, and distribution terminals, and sends 29,000 barrels of refined oil a day to Venezuela. And holders of 8.5% senior secured 2020 bonds have a 51% stake in Citgo Holdings. That is why some large holders have intervened in the Delaware proceeding.

Also in 2011, Venezuela nationalized a gold mine owned by Rusoro Mining Ltd. Rusoro went to arbitration before the ICSID and got a $1.2 billion award in 2016 that was confirmed this year in federal court in D.C. Last week, Venezuela and Rusoro reached a settlement. The parties might start a partnership to reopen the company’s gold mining projects in Venezuela. Rusoro reportedly also has been pursuing Citgo’s assets.

Another key case involves ConocoPhillips. In 2007, Venezuela nationalized ConocoPhillips’ facilities located there. Conoco sought relief in the International Chamber of Commerce and was awarded $2 billion. In 2018, Conoco disrupted PDVSA assets — inventories, cargoes, and terminals — on the Dutch Caribbean islands of Bonaire and St. Eustatius. These facilities are crucial to Venezuela because they process nearly a quarter of the country’s oil exports.

Two months ago, Venezuela and Conoco reached a settlement. Venezuela has agreed to pay Conoco $5 billion over five years, with the first payment of $500 million due next month. And Conoco announced that it would suspend its legal enforcement actions. This should enable Venezuela to increase its oil exports from the two Caribbean islands. Conoco has another proceeding at the ICSID concerning the nationalization of two oil projects. Conoco seeks an award of $6 billion. Reports say a decision could be issued before year end.

We will continue to follow these and other proceedings, with an eye towards how Venezuela’s debt might be restructured and more.

To learn more and hear my recent "Expert Webcast" roundtable discussion on the Venezuelan Debt Crisis, please click here.

Case Summaries

Bankruptcy Court Finds Arbitration Clause in Consumer Loan Contract to be Sufficient Cause to Grant Relief from Automatic Stay

September 28, 2018

Daniel A. Lowenthal

When a bankruptcy petition is filed, an automatic stay comes into effect staying proceedings against the debtor or the debtor’s property. 11 U.S.C. § 362(a). The stay centralizes litigation regarding the debtor and its property in the debtor’s bankruptcy case. When contract entered into pre-bankruptcy contains an arbitration clause, a bankruptcy court will consider if the stay should be enforced or if the parties can resolve the matter in arbitration. In In re Argon Credit, LLC, No. 16-39654 (Bankr. N.D. Ill. Sept. 21, 2018), a bankruptcy court considered this question in a dispute between two non-debtor parties concerning the validity of loans issued by the debtor and part of the debtor’s estate. The bankruptcy court ruled that the arbitration clause was binding and ordered the stay lifted to permit arbitration to go forward.

The debtors, Argon Credit and Argon X (“Argon”), had made small consumer loans and financed its lending via a revolving line of credit agreement with Fintech. To guarantee repayment, Argon gave Fintech a security interest in Argon’s receivables portfolio generated from its consumer loans. This security interest was ultimately assigned to Fund Recovery Services (“FRS”). Argon filed a chapter 11 petition in December 2016, and the case was later converted to chapter 7. FRS sought and was granted relief from the automatic stay to collect the receivables it was entitled to given its security interest, with FRS retaining the proceeds collected on the receivables up to the amount of its allowed claim against Argon, and the consumer loan contracts remaining property of the estate.

Some small California borrowers brought arbitration proceedings against FRS and First Associates, Argon’s loan servicer, arguing that the loans they entered into are invalid because they didn’t comply with California lending law. The loan contracts the borrowers had signed with Argon included broad mandatory arbitration clauses. The bankruptcy court had earlier concluded that these arbitration proceedings were covered by the automatic stay even though Argon itself was not a defendant, because the loan contracts were property of the estate and the borrowers sought declarations that the contracts were invalid. (The bankruptcy court noted some uncertainty as to whether such declarations would bind Argon, a non-party to the arbitrations, but concluded that there was some possibility that they would.) The borrowers thus sought relief from the automatic stay to permit them to pursue the arbitration proceedings.

An applicant for relief from the automatic stay must show “cause.” 11 U.S.C. § 362(d)(1). Relying on prior case law involving the application of the automatic stay to arbitration agreements, the bankruptcy court ruled that an otherwise-binding arbitration agreement is sufficient cause to lift the automatic stay as to a particular issue if the issue is a “non-core” issue, while such cause may not exist if the issue is a “core” issue. The court reasoned that since there is a strong federal interest in enforcing arbitration agreements, there must be a strong countervailing federal bankruptcy interest to overcome the arbitration agreement. Non-core proceedings, the court held, do not ordinarily implicate such strong federal bankruptcy interests.

Bankruptcy law divides proceedings between core proceedings and non-core proceedings. 28 U.S.C. § 157. The origin of this statutory distinction is the constitutional limits on the scope of a bankruptcy court’s jurisdiction. Because the statutory definition is supposed to track the constitutional definition, the court first considered whether the issue regarding the loan contracts’ validity was “core” as a matter of constitutional law. Relying on Stern v. Marshall, 564 U.S. 462, 499 (2011), the court held that an issue is constitutionally core if it “stems from the bankruptcy itself or would necessarily be resolved in claims allowance process.” Because the invalidity claims did not stem from the bankruptcy nor sought relief from the debtor, but rather were state-law claims between third parties, the court concluded that they were not core as a matter of constitutional law.

The court noted that nonetheless the claims arguably fell within the statutory definition in section 157 of the Bankruptcy Code because they could be understood as “matters concerning the administration of the estate” or “other proceedings affecting the liquidation of the assets of the estate,” since the loan contracts and their receivables were the estate’s main assets. However, the court read these provisions narrowly to preserve a meaningful core/non-core distinction. It reasoned that because the contracts had been formed before the bankruptcy case was filed, and because the bankruptcy case was now a chapter 7 liquidation rather than a chapter 11 reorganization, adjudication of the validity of the contracts was not sufficiently entangled in the bankruptcy case to count as a core proceeding.

Because the court concluded that the invalidity claims were not core issues, the court granted the borrowers’ motion for relief from the stay.

Case Summaries

Third Circuit Denies Large Break-up Fee in High-Profile EFH Case

September 21, 2018

Daniel A. Lowenthal

The Third Circuit denied a $275 million break-up fee to a bidder that was unsuccessful in its attempt to buy the crown-jewel assets in the high-profile EFH bankruptcy case. In re Energy Future Holdings Corp., No 18-1109, 2018 U.S. App. LEXIS 25945 (3^rd Cir. Sept. 13, 3018). The court held that the bidder’s efforts didn’t result in a benefit to the debtors’ estates. Therefore, the bidder’s request for an administrative expense in the form of the fee was rejected.

This issue reached the Third Circuit after the Bankruptcy Court in Delaware initially awarded the fee, but then denied it on a motion for reconsideration. The Bankruptcy Court realized that it had misunderstood a key fact when it awarded the fee. When it later realized how the fee could be triggered, the Bankruptcy Court said the bidder wasn’t entitled to the fee. The Bankruptcy Court reversed its prior decision and the appeal followed.[i]

This unusual set of circumstances over such a large break-up fee led the Third Circuit to observe that “this case is anomalous.” 2018 U.S. App. LEXIS 25945, at *41. Perhaps even more important than the result (except to the bidder that won’t receive $275 million) are statements the Third Circuit made concerning the deadline (or lack thereof) for a party to file a motion to reconsider and the test the Circuit applies to determine if a party should receive a break-up fee as an administrative expense claim, which are discussed below.

EFH and its affiliates filed for chapter 11 in 2014 after an LBO failed. The debt was incurred before the 2008 recession when investors thought that natural gas prices would rise. But prices declined due to fracking and other factors, and the EFH entities defaulted on the debt.

The debtors’ crown-jewel asset was Oncor Electric Delivery Company LLC (“Oncor”), which had been ring-fenced from bankruptcy and remained a non-debtor. In 2017, the Bankruptcy Court and the Public Utility Commission of Texas (“PUCT”) approved the sale of Oncor to Sempra Energy. But before that deal succeeded, the PUCT had rejected two other deals: one by NextEra Energy, Inc. (“NextEra”) and the second by Berkshire Hathaway Energy Company. The NextEra deal prompted the litigation over the $275 million break-up fee.

The proposed NextEra deal had an $18.7 billion implied total enterprise value and would pay the debtors $9.5 billion. The PUCT nixed the deal because NextEra sought changes to Oncor’s “ring-fence” protections. The PUCT would not accept these changes, characterizing them as “deal killers.”

With the deal dead, NextEra went back to the Bankruptcy Court and sought the $275 million break-up fee. Based on comments made to the court by the debtors’ counsel, Bankruptcy Judge Christopher Sontchi thought the fee could be awarded based solely on the PUCT’s denial of NextEra’s acquisition of Oncor. A creditor later moved for reconsideration of that award, noting that the fee could be awarded only if the PUCT denied the deal and the debtors terminated the merger agreement.

Judge Sontchi realized that the merger agreement didn’t include a deadline for PUCT approval or rejection of the deal. This meant that if the PUCT didn’t act, then at some point in time the debtors might have to terminate the merger agreement. And NextEra would never have reason to terminate the deal but could wait until the debtors did so (if a PUCT decision wasn’t forthcoming) and then seek to collect $275 million from the bankruptcy estates.

But, Judge Sontchi concluded, this would not justify an administrative expense award for a bidder in NextEra’s position. On reconsideration, Judge Sontchi ruled that NextEra had not demonstrated that the fee was an “actual, necessary cost[] and expense of preserving the estate.” Bankruptcy Code section 503(b)(1)(A).

On appeal, NextEra argued both that (i) the reconsideration motion wasn’t timely filed, and (ii) Judge Sontchi’s decision granting reconsideration should be reversed on the merits. In a 2-1 decision, the Third Circuit affirmed Judge Sontchi’s decision.

The Third Circuit, in an opinion by Judge Greenaway, concluded that the reconsideration motion was timely because the order at issue was interlocutory and not final. The court noted that it takes “a flexible, pragmatic approach to finality in the bankruptcy context.” 2018 U.S. App. LEXIS 25945, at * 22 (citing Century Glove, Inc. v. First Am. Bank of N.Y., 860 F.2d 94, 97 (3^rd Cir. 1988)). The order approving the break-up fee was interlocutory because it didn’t necessarily resolve all issues at stake. At a later date, the Bankruptcy Court might need to decide how to allocate the fee (if it had been approved) among the various debtors and also determine if, as the debtors had also asserted, NextEra had breached the merger agreement.

And because the order was interlocutory, there was no deadline for a party to file a reconsideration motion. In contrast, if the order had been a final one, then time deadlines set forth in Fed. R. Civ. P. 60 and Bankruptcy Rule 9024 would have been applicable and might have barred reconsideration.

On the merits, the Third Circuit noted the Bankruptcy Court’s factual error was subject to review based on the standard of “clear error.” Since the error here “was central to the relevant legal calculus” – whether the break-up fee could and should be awarded – the Third Circuit concluded that it was a “clear or manifest error warranting reconsideration.” 2018 U.S. App. LEXIS 25945, at *33 (emphasis in original).

In the Third Circuit, break-up fees can be awarded as administrative expense claims if a bidder’s action produces a benefit to a debtor’s estate by (i) promoting competitive bidding, (ii) doing due diligence on the debtor that provides a “value of the debtor” that can “convert . . . to a dollar figure on which other bidders can rely,” and (iii) the bidder “adheres to its bid” if an auction is required. Id. at *35 (quoting Calpine Corp. v. O’Brien Environmental Energy, Inc. (In re O’Brien Environmental Energy, Inc.), 181 F.3d 527, 537 (3^rd. Cir. 1999), and In re Reliant Energy Channelview LP, 594 F.3d 200, 207 (3^rd 2010)).

The Third Circuit concluded that NextEra satisfied none of these tests. Instead, it “could simply wait for the Debtors to terminate, which would trigger payment of the $275 million Fee. Under those circumstances, the Termination Fee would provide no benefit to the estate.” 2018 U.S. App. LEXIS 25945, at *37.

In dissent, Judge Rendell noted that the case “presented a difficult situation for the Bankruptcy Court,” but also concluded that it “abused its discretion in granting reconsideration.” Judge Rendell believed that Judge Sontchi’s misunderstanding of a key fact didn’t rise to the level of “legal or factual error.” Id. at *43.

[i] A prior post discussed a decision by the Bankruptcy Court on a related issue: the bidder’s request for a $60 million administrative expense claim as an alternative to the break-up fee. The Bankruptcy Court denied that request as well.

Mr. Lowenthal, Chair of the firm’s Business Reorganization and Creditors' Rights Practice, has earned recognition as a skilled advocate in the bankruptcy, creditors' rights, and corporate restructuring arena. He represents creditors' committees, trade creditors, indenture trustees, and bankruptcy trustees and examiners in domestic and international cases.

Mr. Lowenthal recently served as counsel to the court-appointed Examiner in the chapter 11 cases of FTX Trading Ltd. and its affiliates. In this position, he investigated issues critical to the FTX bankruptcy cases, including potential conflicts of interest and fraudulent transfers, that were summarized in two publicly filed reports.

Mr. Lowenthal also represents U.S. and non-U.S. business entities in a wide range of complex litigation issues, including creditors’ rights disputes, purchases of intellectual property assets, and distressed debt acquisitions and restructuring. He has achieved numerous favorable results for clients in trial and appellate courts as well as commercial arbitration. Recently, he successfully defended former executives of a failed European bank against allegations that they had defrauded investors.

A regular speaker on bankruptcy law topics, Mr. Lowenthal recently presented for the American Bankruptcy Institute, the Practising Law Institute, INSOL International, INSOL Europe, and the Association of Corporate Counsel. Most recently, Mr. Lowenthal was a member of INSOL Europe’s 2023 Amsterdam Congress Technical Committee. He has been recognized by JD Supra’s Readers’ Choice Awards as one of the top ten authors in the Bankruptcy category from 2023-2026. Mr. Lowenthal has received Martindale-Hubbell’s highest rating of "AV Preeminent" based on both peer and client reviews and has been named to The Best Lawyers in America in the area of Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law. He has also been named by Super Lawyers in the areas of bankruptcy: business and business litigation. Lastly, Mr. Lowenthal has been named to the 2022-2026 editions of the Lawdragon 500 Leading U.S. Bankruptcy & Restructuring Lawyers guide.

Representative Matters

Represented court-appointed Examiner in chapter 11 cases of FTX Trading Ltd., including assisting him with various investigations summarized in two publicly filed reports.

Represented foreign administrators of a global alternative energy company in its chapter 15 cross-border bankruptcy case, successfully petitioning the court for the return of over $28 million held in a U.S. bank account.

Representing noteholders of a Brazilian company in a lawsuit arising from a debt default.

Representing the Oversight Committee for a post-confirmation liquidating trust in the Southern District of Texas.

Representing the Indenture Trustee for a series of unsecured notes in connection with an Italian insolvency proceeding and a related chapter 15 case.

Represented a bidder in a competitive auction to acquire the assets of a chapter 11 debtor.

Lead counsel to the Official Committee of Unsecured Creditors of multi-state real estate developer with liabilities in excess of a billion dollars. The Bankruptcy Court praised the “remarkable results” achieved through the “extraordinary efforts” of Patterson Belknap attorneys in this case.

Representing an international financial institution as Indenture Trustee in cross-border insolvency cases pending in Grand Cayman and Hong Kong.

Represented an Indenture Trustee and Co-Chair of the Official Committee of Unsecured Creditors on over $5 billion of unsecured debt in one of the largest, most complex cases ever filed in Delaware, the Energy Future Holdings Corp. cases.

Represented an Indenture Trustee in the Nortel Networks Inc. cross-border cases, a set of insolvency cases filed in the U.S., the U.K., and Canada.

Represented an Indenture Trustee on bonds governed by New York law in an insolvency case in London.

Represented an Indenture Trustee on $1.7 billion of unsecured debt in the Washington Mutual, Inc. case.

Representing a former member of the Board of Directors in The Weinstein Company Holdings bankruptcy case.

Represented an international law firm in a proceeding before the U.S. Bankruptcy Court relating to conflicts of interest in a Chapter 11 representation.

Represented the winning bidder in an auction to acquire the assets and intellectual property from a Chapter 7 debtor over the objection and competing bid of the debtor’s secured lender.

Special litigation counsel to an Official Committee of Unsecured Creditors to investigate fraudulent conveyance claims.

Conducted an internal investigation of a multi-national law firm following its role in a large Chapter 11 bankruptcy case.

Representing the Post-Confirmation Trustee in the Tarragon Corporation case.

Special litigation counsel to a Chapter 7 trustee in the bankruptcy of an employee leasing company.

Represented an Indenture Trustee in the Nortel Networks Inc. cross-border cases, a set of insolvency cases filed in the U.S., the U.K., and Canada.

Represented the Liquidating Trust Board in the TerreStar Networks Inc. case.

Represented the Trust Oversight Committee in the Disney retail store chain case.

Represented Harrison J. Goldin, an Examiner in the Enron Corp. case, in an investigation of many of Enron's special-purpose-entity transactions.

Representing international creditors, including entities in the U.K., the Netherlands, and Germany, in the Lehman Brothers Holdings Inc. case.

Represented a Scottish aviation company in the Hawker Beechraft Corporation case.

Defending a reinsurance company in a fraudulent conveyance lawsuit brought by creditors of Tribune Company in U.S. Federal Court.

Representing a Mexican creditor in the Stanford International Bank Ltd. case.

Obtained a favorable result on behalf of the largest private bank in Brazil in connection with the Chapter 15 case of a Brazilian company.

Represented the Retiree Committee in the U.S. Airways, Inc. case, including serving as trial counsel on the debtor’s motion to eliminate retiree benefits.

Won a crucial decision of first impression for financial institutions whose security interests were challenged by the bankruptcy trustee in The Bennett Funding Group, Inc. case, a case that stemmed from an alleged $1 billion Ponzi scheme.

Represented the Official Committee of Unsecured Creditors in the STAR Telecommunications, Inc. case.

U.S. Courts of Appeals, Second Circuit; Third Circuit
U.S. District Court, Southern, Eastern and Northern Districts of New York
New York

MEMBERSHIPS: American Bar Association; Bankruptcy and Corporate Reorganization Committee of the New York City Bar Association; American Bankruptcy Institute; Board of Editors, The Bankruptcy Strategist; INSOL International; INSOL Europe (2023 Amsterdam Congress Technical Committee); Turnaround Management Association and the New York Institute of Credit.

"Federal District Court Ruling Upholds Uptier Transactions," INSOL International (February 18, 2026)
"Judge Blasts Defendant for Ignoring Discovery Obligations and More," Law.com (January 27, 2026)
"Ninth Circuit Rules that Decision Reimposing the Automatic Stay is Immediately Appealable," The Bankruptcy Strategist (October 1, 2025)
"The Divestiture Rule Explained: A Judge-Made Doctrine Doesn’t Necessarily Deprive a Lower Court of Ongoing Subject Matter Jurisdiction," The Bankruptcy Strategist (June 30, 2025)
"Non-Creditor Was Entitled to Actual Notice of A Chapter 11 Plan's Injunction Barring Suits Against Insurance Carriers," The Bankruptcy Strategist (May 14, 2025)
"Formal & Informal Negotiation ASAP!" Eurofenix, the Journal of INSOL Europe (Spring 2025)
"A Primer on Chapter 11 Trustees & Examiners," New York Law Journal (April 9, 2025)
"The Barton Doctrine: Suit Against Receiver Did Not Require Court Permission," The Bankruptcy Strategist (March 31, 2025)
"Court Rules Mere Conduit Defense Not Suitable for a Motion to Dismiss," The Bankruptcy Strategist (November 2024)
"Ch. 11 Ruling Shows Early Attempt To Tackle Purdue Fallout," Law360 (September 5, 2024)
"Courts Split Over Requirement for Chapter 15 Jurisdiction In the U.S.," The Bankruptcy Strategist (June 2024)
"Bankruptcy Courts Have Contempt Power, Del. Case Reminds," Law360 (May 14, 2024)
"Bankruptcy Ruling Stresses Value of Client Communication," Law360 (March 25, 2024)
"Navigating Asset Tracing Challenges in Bankruptcy," Law360 (December 11, 2023)
"Section 363 Ruling Lines Up With Avoidance Action Precedent," Law360, (September 26, 2023)
"Post-Siegel Trustee Fee Rulings Further Debtor-Friendly Trend," Law360, (June 9, 2023)
"A Curious Bankruptcy Case Where Bad Behavior's Overlooked," Law360, (April 14, 2023)
"Substantial Contribution: a New Decision from the 3rd Circuit," Westlaw Today, (January 11, 2023)
“U.S. Bankruptcy Court Denies Chapter 15 Recognition to a Case on the Isle of Man,” The Bankruptcy Strategist, (January 2023)
"FTX Bankruptcy Provides A Road Map For Crypto Regulation" Law360, (December 1, 2022)
"What to Do If Your Tenant Is Bankrupt" American Bar Association, (November 29, 2022)
"Bankruptcy Ruling Provides Clarity On Administrative Priority" Law360, (October 28, 2022)
"Golf Project Ch. 11 Ruling Is A Deal Term Negotiation Lesson" Law360, (August 29, 2022)
"Examining Equitable Mootness After High Court Ch. 11 Denial" Law360, (July 2022)
"Recent Decision on Derivative Standing by a Creditors' Committee to Challenge a Lender's Liens" INSOL International News Update, (November 2021)
"The Impact of the CARES Act on US Consumers, Small Businesses, Bankruptcy and Insolvency Laws and Procedures" International Corporate Rescue, (May 2020)
"Bankruptcy Sales Under Section 363: The Business Judgment Test That Judges Often Cite Isn't Always the One They Use" Norton Journal of Bankruptcy Law and Practice, (February 2020)
"Bankruptcy Courts Don’t Need to Hold an Evidentiary Hearing in Order to Appoint a Chapter 11 Trustee" National Association of Credit Management, eNews, (January 2020)
"Court Decision Discusses the Barton Doctrine and the Automatic Stay in Chapter 15," INSOL International News Update, (December 2019)
"A Bankruptcy Code Chapter 15 Primer: Decision in New York Addresses Key Issues of Jurisdiction, Recognition, Public Policy, and More," INSOL International News Update, (November 2019)
Contributor to the Firm's Bankruptcy Update Blog
"New York Bankruptcy Court Issues Ruling on Recognition of Foreign Proceedings," INSOL International News Update, (September 2019)
"Buyers vs. Tenants in a Bankruptcy Sale A Tension Between §§363(f) and 365(h)," New York Law Journal, (June 2019)
Co-Author "The 'Substantial Contribution' Test for Indenture Trustees," ABI Journal, (February, 2019)
"Chapter 15: Court Permits Foreign Debtors to Access and Receive Funds in U.S. Account," INSOL International News Update, (February, 2019)
Co-Author "SCOTUS Recap: What Lies Ahead For the Lower Courts’ Tests for ‘Non-Statutory Insiders’," The Bankruptcy Strategist, (May, 2018)
"Venezuelan Debt Crisis Intensifies as Its Leaders Ponder Responses," Journal of Corporate Renewal, (March, 2018)
"Chapter 15: U.S. Creditor Required to Seek Recovery in Foreign Main Proceeding," INSOL International News Update, (February, 2018)
"Federal judge joins others, says bankruptcy court not allowed to impose punitive sanctions," Legal Newsline, (January, 2018)
"Retail Woes Mount as List of Troubled Companies Grows," Journal of Corporate Renewal, (June, 2017)
"In re Creative Finance Ltd: Chapter 15 Case Dismissed," INSOL International News Update, (February, 2016)
“Rights of Trade Creditors in the US,” Eurofenix, The Journal of INSOL Europe, (Spring 2015)
"Tough Choices Confront Trade Creditors When a Retailer Faces Bankruptcy," Journal of Corporate Renewal, (October, 2014) and the Sydney (Australia) Insolvency News, (February 3, 2015)
"Equitable Mootness: Two Recent Third Circuit Decisions," The Bankruptcy Strategist, (January, 2014)
"Stanwich Clarifies Wagoner Rule in Fraudulent Transfer Cases," Journal of Corporate Renewal, (October, 2013)
"Section 365(o) Coming into Focus," The Bankruptcy Strategist, (January, 2011)
"The Absolute Priority Rule: An Analysis in Terms of Armstrong World Indus., Inc.," The Bankruptcy Strategist, (June, 2006)
"Revisions to Bankruptcy Code Sections 365 and 366," The Bankruptcy Strategist, (April/May, 2005)
"Critical Vendor Actions: Paying Vendors to Supply Chapter 11 Debtors," The Bankruptcy Strategist, (June, 2003)
"Fraudulent Conveyance of Licenses Auctioned by the FCC: The 5th Circuit View," The Bankruptcy Strategist, (December, 2000)
"Analyzing Letter of Credit Issues in the Bankruptcy Context," The Bankruptcy Strategist, (June, 1998)
"3d Circuit Offers Primer on Valuing Debtor's Assets, Liabilities," The Bankruptcy Strategist, (April, 1998)
"Is a 'Mere Conduit' an 'Initial Transferee' Under Section 550?," The Bankruptcy Strategist, (March, 1998)

The George Washington University Law School (J.D., with honors, 1987)
Duke University (A.B., magna cum laude, 1982)

Recent Speaking Engagements

"Dissecting the Role of Chapter 11 Examiners and Trustees," Celesq Webinar (April 17, 2025)
"Formal and Informal Negotiation ASAP!" INSOL Europe's 2024 Congress in Sorrento, Italy (October 4, 2024)
"Tracing and recovery of debtor's assets by insolvency practitioners," INSOL Europe Annual Congress in Amsterdam (October 13, 2023)
"Are Bankruptcies/Insolvencies/Restructurings Returning?," SCG Legal's Midyear Meeting in Berlin, Germany - Panel Moderator (May 12, 2023)
“An Overview of Chapter 11,” Conseil National des Administrateurs Judiciaires et des Mandataires Judiciaires in La-Colle-sur-Loup, France (June 10, 2022)
“Equitable Mootness: What Should the Law Be?” American Bankruptcy Institute’s Annual Spring Meeting in Washington, D.C. (April 29, 2022)
"Chapter 15 at 15," New York City Bar Committee on Bankruptcy and Corporate Reorganization — Event Co-Chair (May 12, 2021)
“Venezuelan Debt Crisis and Related Social and Political Issues,” New York City Bar Committee on Bankruptcy and Corporate Reorganization (June 19, 2019)
"Asset Sales in Bankruptcy,"American Bankruptcy Institute's New York City Bankruptcy Conference (May 22, 2019)
"Venezuelan Debt Crisis," Expert Webcast (October 11, 2018)
"Cross-border Bankruptcy Issues," American Bankruptcy Institute's New York City Bankruptcy Conference (May 24, 2018)
"Cross-border Insolvencies," Fashion Institute of Technology State University of New York, International Finance Class (May 3, 2018)
"Cross-Border Panel," American Bankruptcy Institute's New York City Bankruptcy Conference (May 18, 2017)
“Cross-Border Insolvency Concepts,” Global Restructuring and Insolvency Conference in Barcelona (March 10, 2017)
"Current Issues in Retention and Compensation of Bankruptcy Professionals," American Bankruptcy Institute's 18^thAnnual New York City Bankruptcy Conference (May 12, 2016)
"View from the Islands: How Does Common Law Compare with Statutory Recognition Principles?," INSOL Annual Regional Conference in Dubai (January 25, 2016)
“Bankruptcy and the Retail Industry,” Industry Event in New York City (June 15, 2015)
"Cross-Border Bankruptcy Issues," ABI New York City Bankruptcy Conference (May 14, 2015)
Pre-Packaged Insolvency Proceedings: Developments and Hard Lessons Learned," INSOL Europe Annual Congress in Istanbul (October 10, 2014)
“Cross-Border Bankruptcy Issues,” ABI New York City Bankruptcy Conference (May 15, 2014)
“Bankruptcies in the United States: Key Chapter 11 Concepts,” Australian Restructuring Insolvency & Turnaround Association in Sydney (April 14, 2014)
“Intellectual Property Issues in Bankruptcy,” Asian American Bar Association of New York (July 11, 2013)
“Trademark and Patent Licenses in Bankruptcy,” ABI New York City Bankruptcy Conference (May 16, 2013)
“What In-House Counsel Need to Know Before a Counterparty Bankruptcy,” Association of Corporate Counsel Webcast (September 12, 2012)
"How Are the Lower Courts Dealing with Stern v. Marshall?" ABI New York City Bankruptcy Conference (May 9, 2012)
"Strategies to Succeed in a Crisis - How to Protect Creditors' Interests in the U.S. and Germany," Bankruptcy Seminar in Frankfurt, Germany (April 29, 2009)

News

October 28, 2024

Patterson Belknap Attorney Served as
Independent Examiner in FTX Bankruptcy Case
Firm Serves as Counsel to the Examiner

Patterson Belknap attorney Robert J. Cleary served as the Independent Examiner in the FTX Trading Ltd. bankruptcy cases pending in Delaware. Mr. Cleary was responsible for drafting an initial report summarizing the findings and status of all previous investigations into the...

December 15, 2023

Firm Secures Settlement in Multi-Million Dollar Investment Fraud Case

December 7, 2022

Firm Represents Global Alternative Energy Company in Cross-Border Chapter 15 Bankruptcy

October 28, 2024

Patterson Belknap Attorney Served as
Independent Examiner in FTX Bankruptcy Case
Firm Serves as Counsel to the Examiner

December 15, 2023

Firm Secures Settlement in Multi-Million Dollar Investment Fraud Case

December 7, 2022

Firm Represents Global Alternative Energy Company in Cross-Border Chapter 15 Bankruptcy

October 31, 2022

Firm Attorneys Honored by Legal Aid Society at 2022 Pro Publico Awards

January 12, 2021

Patterson Belknap Launches Commercial Real Estate Workouts and Litigation Group

September 14, 2017

Patterson Belknap Launches Bankruptcy Update Blog

January 31, 2017

Daniel A. Lowenthal Named Chair of the Firm’s Business Reorganization and Creditors’ Rights Practice

September 23, 2010

Partner Dan Lowenthal Profiled in Bankruptcy Professional

October 31, 2022

Firm Attorneys Honored by Legal Aid Society at 2022 Pro Publico Awards

January 12, 2021

Patterson Belknap Launches Commercial Real Estate Workouts and Litigation Group

September 14, 2017

Patterson Belknap Launches Bankruptcy Update Blog

January 31, 2017

Daniel A. Lowenthal Named Chair of the Firm’s Business Reorganization and Creditors’ Rights Practice

September 23, 2010

Partner Dan Lowenthal Profiled in Bankruptcy Professional

Venezuela Debt Update: Recent Developments in Arbitrations that Could Impact Restructuring Efforts

Bankruptcy Court Finds Arbitration Clause in Consumer Loan Contract to be Sufficient Cause to Grant Relief from Automatic Stay

Third Circuit Denies Large Break-up Fee in High-Profile EFH Case

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Daniel A. Lowenthal

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Bankruptcy Update Blog

Bankruptcy Court Denies Motions to Convert Case and to Appoint an Examiner

Arbitration and Bankruptcy: Can a Debtor that is Party to an Arbitration Agreement Lack Authority to Arbitrate Core Bankruptcy Claims?

Bankruptcy Avoidance Law: Court Allows Bankruptcy Trustee to Sue a Subsequent Transferee Even When the Initial Transferee Isn’t a Defendant

Bankruptcy Court Denies Motions to Convert Case and to Appoint an Examiner

Arbitration and Bankruptcy: Can a Debtor that is Party to an Arbitration Agreement Lack Authority to Arbitrate Core Bankruptcy Claims?

Bankruptcy Avoidance Law: Court Allows Bankruptcy Trustee to Sue a Subsequent Transferee Even When the Initial Transferee Isn’t a Defendant

Judge Blasts Defendant For Ignoring Discovery Obligations and More

Debts Related to Ponzi Scheme Deemed Non-Dischargeable

Federal District Court Ruling Upholds Uptier Transactions

Bankruptcy Court Clarifies Scope of Trustee’s Due Diligence Prior to Filing Preference Action

The Bourbon Industry Faces Hard Times

Ninth Circuit Rules that Decision Reimposing the Automatic Stay is Immediately Appealable

Judge Blasts Defendant For Ignoring Discovery Obligations and More

Debts Related to Ponzi Scheme Deemed Non-Dischargeable

Federal District Court Ruling Upholds Uptier Transactions

Bankruptcy Court Clarifies Scope of Trustee’s Due Diligence Prior to Filing Preference Action

The Bourbon Industry Faces Hard Times

Ninth Circuit Rules that Decision Reimposing the Automatic Stay is Immediately Appealable

Publications

Judge Blasts Defendant for Ignoring Discovery Obligations and More

Ninth Circuit Rules that Decision Reimposing the Automatic Stay is Immediately Appealable

The Divestiture Rule Explained: A Judge-Made Doctrine Doesn't Necessarily Deprive a Lower Court of Ongoing Subject Matter Jurisdiction

Judge Blasts Defendant for Ignoring Discovery Obligations and More

Ninth Circuit Rules that Decision Reimposing the Automatic Stay is Immediately Appealable

The Divestiture Rule Explained: A Judge-Made Doctrine Doesn't Necessarily Deprive a Lower Court of Ongoing Subject Matter Jurisdiction

Formal & Informal Negotiations ASAP!

A Primer on Chapter 11 Trustees & Examiners

Court Rules Mere Conduit Defense Not Suitable for a Motion to Dismiss

Ch. 11 Ruling Shows Early Attempt To Tackle Purdue Fallout

Bankruptcy Ruling Stresses Value of Client Communication

Navigating Asset Tracing Challenges in Bankruptcy

Formal & Informal Negotiations ASAP!

A Primer on Chapter 11 Trustees & Examiners

Court Rules Mere Conduit Defense Not Suitable for a Motion to Dismiss

Ch. 11 Ruling Shows Early Attempt To Tackle Purdue Fallout

Bankruptcy Ruling Stresses Value of Client Communication

Navigating Asset Tracing Challenges in Bankruptcy

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