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Ninth Circuit: Fully Secured, Nonrecourse Creditors Qualify As ‘Countable’ Creditors
Addressing a matter of first impression, the bankruptcy appellate panel for the U.S. Court of Appeals for the Ninth Circuit (BAP) recently held that fully secured, nonrecourse creditors qualify as “countable” creditors for purposes of determining the viability of an involuntary bankruptcy petition under Section 303(b) of the U.S. Bankruptcy Code. See, I, 664 B.R. 162 (9th Cir. BAP 2024). In so doing, the King decision highlights a potential pitfall for creditors who contemplate the filing of an involuntary bankruptcy petition against a putative debtor.
Background
In August 2022, Wolverine Endeavors VIII, LLC filed an involuntary Chapter 7 petition against Carole D. King. Wolverine was the sole petitioning creditor, and asserted a claim in excess of $7 million against King on account of a previously obtained judgment. King, in turn, moved to dismiss the involuntary on the basis that she had at least 12 countable creditors as determined under section 303(b) of the code, and, as a consequence, at least three petitioning creditors were necessary in order for the petition to be viable.
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.
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.
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.
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.
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.