• Current Issues In Enforcing Judgments Against LLCs

    June 01, 2018 |

    When a creditor obtains a judgment against a debtor, the debtor's assets are sometimes held in membership interests in an LLC, which presents challenges for the creditor seeking recovery. The Uniform LLC Law provided for a charging order in such instances. Although the precise terms of each state's LLC laws vary, some version of the charging order procedure is available in all states.

  • How the New UST Fee Schedule Is a Ticking Tax-Bomb for Middle Market Debtors

    May 01, 2018 |

    As of Jan. 1, 2018, each jointly administered debtor with quarterly disbursements of at least $1,000,000 must pay a fee of 1% of all disbursements, up to $250,000 per quarter. Although this change in the law was only intended to address shortfalls in UST funding, it has taken a little-noticed component of bankruptcy and magnified it into a ticking tax-bomb for unsuspecting debtors and their lenders.

  • SCOTUS Recap: What Lies Ahead for the Lower Courts' Tests for “Non-Statutory Insiders”

    May 01, 2018 |

    Ultimately, Village at Lakeridge is noteworthy for what the Supreme Court did not decide. In granting certiorari, the Supreme Court declined to address whether the lower courts' various “non-statutory insider” tests should be refined. As concurrences from Justices Sotomayor and Kennedy emphasized, though, that issue is ripe for increased scrutiny.

  • A Cautionary Tale for Lender Overreaching into Bankruptcy Remoteness

    April 01, 2018 |

    In re Lexington Hospitality Group, LLC

    Bankruptcy remote structures are often used to protect against the impact of default under a credit facility. A common mechanism is organizational documents requiring an outside director or member's vote to authorize a bankruptcy filing. However, the United States Bankruptcy Court for the Eastern District of Kentucky found that such a requirement implemented at the behest of a lender, among other bankruptcy restrictions, and where there was not true independence frustrated the important federal public policy of favoring fresh starts in bankruptcy.

  • The Ripple Effect of Rejecting Trademark Licenses

    April 01, 2018 |

    The First Circuit Widens the Controversy

    In In re Tempnology, the First Circuit held that the debtor's rejection of a trademark license strips the nondebtor licensee of any right to continue to use the trademarks. In so doing, the court takes the same approach as the Fourth Circuit and rejects the approaches advocated by the Third and Seventh Circuits.

  • On the Move

    April 01, 2018 |

    Movers and shakers in bankruptcy law.