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The filing of a bankruptcy case by a company creates substantial uncertainty for its employees. This uncertainty can translate into employee departures, lack of focus on the business, and diminution in the value of the company. Recognizing these potential consequences, companies in Chapter 11 bankruptcy often try to reduce employee uncertainty by seeking authority from the bankruptcy court to: 1) honor unpaid compensation and benefit obligations to employees; 2) continue severance and benefit plans post-bankruptcy; and/or 3) continue existing bonus programs or establish retention or new incentive programs for employees.
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By Steven B. Smith and Silvia Stockman
This article explores the competing factors the Bankruptcy Court considered and the rationale underlying its decision to grant the drastic relief of dismissing the NRA’s bankruptcy case.
By By Andrew C. Kassner and Joseph N. Argentina Jr.
How is administrative claim status obtained in a bankruptcy case, and what risks does a service or goods supplier take by continuing to do business with the debtor after commencement of the bankruptcy case?
By Rudolph J. Di Massa Jr. and Drew S. McGehrin
U.S. Bankruptcy Court for the District of Delaware court held that a Chapter 7 trustee was bound by the pre-conversion actions of the debtors, and that the trustee would not be permitted to step into the shoes of the then-dissolved official committee of unsecured creditors to pursue certain causes of action.
By Rudolph J. Di Massa Jr. and Malcolm Bates
Parties holding potential claims against non-debtor third parties that are arguably “related to” the bankruptcy estate must weigh the risks and benefits of actively prosecuting such claims. The mere fact that a bankruptcy trustee could pursue such claims as property of the bankruptcy estate under Section 541 of the Bankruptcy Code will not be enough to argue that such claims are conclusively barred by the automatic stay.