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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.
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Seventh Circuit Applies Safe Harbor to Private Securities Transaction
By Michael L. Cook
“… [T]he term ‘securities contract’ as used in [Bankruptcy Code] §546(e) unambiguously includes contracts involving privately held securities,” The Seventh Circuit held in Petr v. BMO Harris Bank, N.A.
By Lawrence J. Kotler and Elisa Hyder
In Lafferty v. Off-Spec Solutions, the U.S. Bankruptcy Appellate Panel of the Ninth Circuit held that the discharge exceptions under Section 523(a) do not apply to corporate debtors under Subchapter V of Chapter 11 of the Bankruptcy Code.
Merchant Cash Advances Could Be More Trouble Than They’re Worth
By Joseph Pack and Jessey Krehl
As small-business owners have continued to struggle in an uncertain economy, a growing number have begun the dangerous practice of relying on merchant cash advances — essentially seeking financial shelter in a lion’s den.
Biotech Industry Bankruptcy Case Update: ‘Zymergen’ and ‘Humanigen’
By Edward E. Neiger, Marianna Udem and Joo Hee Park
This Bankruptcy Case Update focuses on the recent biotech industry bankruptcy cases of Zymergen and Humanigen.
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