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Can a Debtor That Has No Ongoing Business Operations Reorganize Under Chapter 11 In Good Faith?
Under Section 1112(b)(1) of the Bankruptcy Code (the code), a bankruptcy court may convert or dismiss a Chapter 11 case for "cause," including, for example, when a debtor files a bankruptcy petition in bad faith. In a recent decision, In re HONX, No 22-90035 (Bankr. S.D. Tex. Dec. 28, 2022), the U.S. Bankruptcy Court for the Southern District of Texas (the court) addressed whether a debtor that has no independent assets or ongoing business operations can reorganize under Chapter 11 in good faith.
Background
From 1965 to 1998, HONX, Inc. — a wholly owned subsidiary of the Hess Corp. — operated a petroleum refinery on the island of St. Croix, U.S. Virgin Islands. Since the 1980s, more than 1,500 plaintiffs filed personal injury suits against HONX and its predecessors alleging that they were exposed to asbestos at HONX's refinery.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.