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As predicted in the first part of this article (May, 2018), the new United States Trustee (UST) fee has had a disproportionate effect on middle-market, high-velocity cash flow companies. The best solution is for Congress to revisit the fee structure and refine it to reflect the realities of particular cases and the actual burden on the UST.
As predicted in the first part of this article (May, 2018), the new United States Trustee (UST) fee has had a disproportionate effect on middle-market, high-velocity cash flow companies. See, Katy Stech Ferek, Companies Grapple with Rise in Bankruptcy Fees, Wall St. J. Sept. 6, 2018. In fact, several debtors and cases have already been disrupted by the abrupt change in the UST fee schedule, with one debtor being forced to relinquish control of its business to a Chapter 11 trustee after it couldn’t pay the increased fee (which was accruing at a faster pace than the interest on the debtor’s DIP loan). See, Order Directing Appointment of Trustee, In re Peninsular Airways, Inc., Case No. 17-00282, Docket No. 409.
Fifth Circuit Blocks Fraudulent Transferee’s Good Faith Defense
By Michael L. Cook
“A … transferee [who] received fraudulent transfers with actual knowledge or inquiry notice of fraud or insolvency” loses any “good faith” defense available under the Texas version of the Uniform Fraudulent Transfer Act (TUFTA), held the Fifth Circuit in Janvey v. GMAG, LLC
What Has Merit Management Changed?
By Matthew Gold
It has been nearly two years since the Supreme Court upended the world of the Bankruptcy Code securities safe harbor with its decision in Merit Management Group, LP v. FTI Consulting, Inc.. For all of the speculation regarding its consequences, there have been few subsequent lower court decisions applying Merit Management, however those cases provide valuable guidance to practitioners facing safe harbor litigation as well as transactional lawyers looking to take advantage of safe harbor protections.
A Clash Between ‘Free and Clear’ and Tenants’ Rights Under Bankruptcy Code Section 365(h)
By Albena Petrakov
With the recent carnage in the retail industry, a lot of attention goes to the fate of landlords when their tenants seek bankruptcy protection. A recent case that brings balance is Revel AC Inc. v. IDEA Boardwalk, LLC.
Preference Attacks To Recover Prepetition Compensation Paid to Consultants of Troubled Companies
By Paul A. Rubin and Hanh V. Huynh
Employees of a troubled company who stay on as consultants to assist in liquidating its assets or preparing the company for a bankruptcy filing may later be disappointed to face claims to claw back their prepetition compensation.
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