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The COVID-19 pandemic is already leaving its mark on the bankruptcy asset sale landscape. Some going-concern and liquidation sales have been suspended or cancelled. Debtors have struggled to market their assets, both pre- and post-petition, in the face of unprecedented disruption and uncertainty. Despite this uncertainty — or even because of it — bankruptcy should still be viewed as a useful tool to effectuate the acquisition of assets. The current situation and anticipated distress across many industries presents opportunities for purchasers to acquire assets on favorable terms. The benefits to the purchaser of, among other things, receiving the assets free and clear of liens, claims and encumbrances and the ability to cherry pick executory contracts caught the attention of financial and strategic acquirers for quite some time. However, each industry presents unique issues that should be considered when weighing bankruptcy as an option and, if a case is already pending, a bid for or acquisition of assets of a debtor.
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By Marisa L. Byram
While commercial leases and the force majeure clauses contained in such leases vary widely, a recent decision from the United States Bankruptcy Court for the Northern District of Illinois may provide guidance to parties and help them to resolve similar disputes without resorting to the courts.
By Dana Delman and John Vukmanovic
In attempts to alleviate the impact of job losses and business disruption due to COVID-19, state and local governments have passed emergency orders and regulations temporarily prohibiting evictions and extending deadlines to pay rent, among other restrictions. When those restrictions are lifted, there is no guarantee that they will have done more than delay the inevitable: eviction and bankruptcy.
By Rudolph J. Di Massa, Jr. and Geoffrey A. Heaton
In a recent decision, the U.S. Bankruptcy Court for the Southern District of New York held that claim disallowance issues under Section 502(d) of the Bankruptcy Code “travel with” the claim, and not with the claimant.
By Francis J. Lawall and Marcy J. McLaughlin Smith
Under the Bankruptcy Code, not only can the initial recipient of a fraudulent conveyance be held liable, but so too can a subsequent transferee. However, there can be important nuances in the challenged transaction that may provide a subsequent transferee with a substantial defense.