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On Jan. 22-25, 2018, a bench trial occurred in Gary F. Seitz, Chapter 7 Trustee of Covenant Partners, L.P. v. William B. Fretz, Jr. and John P. Freeman (In re Covenant Partners, L.P.), 2018 U.S. Dist. LEXIS 156652 (E.D. Pa. 9/13/18) (Seitz), an adversary proceeding in In re Covenant Partners, L.P., No. 14-17568-SR, Bankr. E.D. Pa. in which the Trustee of Debtor, Covenant Partners, L.P., sued for breach of fiduciary duty.
By Carl E. Black and Jonathan Noble Edel
Recognizing the potential consequences, companies in Chapter 11 bankruptcy often try to reduce employee uncertainty by seeking authority from the bankruptcy court. The Bankruptcy Code, however, imposes a variety of limitations on the ability of a debtor-employer to provide certain types of compensation and benefits to “insiders,” a term that is broadly defined in the Bankruptcy Code.
By Michael L. Cook
“[A] secured creditor [has no] affirmative obligation under the automatic stay to return a debtor’s [repossessed] collateral to the bankruptcy estate immediately upon notice of the debtor’s bankruptcy,” the U.S. Court of Appeals for the Third Circuit held on Oct. 28, 2019 in In re Denby-Peterson.
By Rudolph J. Di Massa Jr. and Jarret P. Hitchings
The assumption that bankruptcy can’t relieve a borrower of student loan obligations is incorrect, however a debtor must provide compelling evidence that an undue hardship will result if the debtor is required to repay the loan.
By Peter Janovsky
A debtor’s goal in a Chapter 11 Bankruptcy is to confirm a “plan of reorganization.” Creditors usually have the right to vote for or against a plan, and in some cases, a plan can be confirmed over the objection of one or more classes of creditors. This is called a “cram-down.” The Bankruptcy Code’s rules governing cram-down are complex and differ for secured and unsecured classes of creditors. This article shows how bankruptcy courts have ruled on a particular method of cram-down known as a “dirt-for-debt” plan.