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Preserving Bargained for Contractual Entitlements In a Cure and Reinstate Plan
Consider the following scenario: Debtor Co. and Finance Co. are parties to an equipment finance lease governing certain equipment used by Debtor Co. in the operation of its business. Prior to the petition date, certain monetary and monetary defaults occurred under the contract, which under the terms of the contract and applicable non-bankruptcy law, entitled Finance Co. to accelerate the debt. Post-petition, Debtor Co. resumes payments under the contract and proposes a chapter 11 plan of reorganization that states it will pay or dispute claims under the contract in the ordinary course of business. The plan classifies Finance Co. as unimpaired. Great news, right? Not so fast.
Section 1124(1) of the Bankruptcy Code provides that a claim is unimpaired if the plan "leaves unaltered the legal, equitable, and contractual rights to which such claim or interest entitles the holder of such claim or interest." Alternatively, under Section 1124(2), a debtor can render a claim unimpaired by satisfying the relevant requirements enumerated in Section 1124(2)(A) – (E). Broadly stated, in order for a claim to be classified as unimpaired, Section 1124(2) requires a debtor to cure defaults, reinstate the maturity date, compensate the creditor for certain losses, and not otherwise alter the creditor's legal, equitable, or contractual rights
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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.
Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs
A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.
Coverage Issues Stemming from Dry Cleaner Contamination Suits
In recent years, there has been a growing number of dry cleaners claiming to be "organic," "green," or "eco-friendly." While that may be true with respect to some, many dry cleaners continue to use a cleaning method involving the use of a solvent called perchloroethylene, commonly known as perc. And, there seems to be an increasing number of lawsuits stemming from environmental problems associated with historic dry cleaning operations utilizing this chemical.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?