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Sales of substantially all of a debtor’s assets are commonplace in corporate Chapter 11 bankruptcies. In many cases, the proposed sale is the primary reason the case is filed. The sale is supervised and approved by the Bankruptcy Court. Purchasers desire to know that if the sale is consummated, they will be protected from subsequent attacks on the sale and the sale process. If court-approved bankruptcy sales are protected from subsequent attacks, presumably more bidders will participate, resulting in greater returns for the estates and creditors. Issues surrounding the finality of a bankruptcy sale were recently reviewed by the U.S. Court of Appeals for the Eighth Circuit in In re Veg Liquidation, (f/k/a Allens, Inc.), Case No. 18-1786 (July 26, 2019).
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.
By Aaron R. Cahn
Any Cannabis-Related Business or Any Business In a Relationship With One Will Likely Find Itself Barred from the Door of the Federal Bankruptcy Courts
The ability to file a federal bankruptcy case is an important resource for struggling businesses. It is particularly important to start-up businesses in an emerging field, such as the production and marketing of cannabis-related products. It is precisely this resource, however, that is currently being denied to cannabis-related businesses.
By Mark D. Silverschotz
The new decision is significant because lawsuits against former (and current) officers and directors of debtors commonly are brought, as here, by trusts established under plans of reorganization. Because insurance policies often are the only viable source of recovery for the claims asserted in such lawsuits, this decision potentially opens a pathway to creditor recovery in other similar matters.
By Chris Updike and Joseph Zujkowski
Faster, Shorter, Smarter, Better
Among other trends, practitioners are increasingly using pre-packaged and pre-negotiated cases, drafting clearer and more concise pleadings, employing smarter deposit management practices, and harnessing improved technology — strategies for a new era of bankruptcy.