• The Bankruptcy Strategist

    Overview of Limitations on Employee Compensation in Bankruptcy

    Carl E. Black and Jonathan Noble Edel

    Recognizing the potential consequences, companies in Chapter 11 bankruptcy often try to reduce employee uncertainty by seeking authority from the bankruptcy court. The Bankruptcy Code, however, imposes a variety of limitations on the ability of a debtor-employer to provide certain types of compensation and benefits to “insiders,” a term that is broadly defined in the Bankruptcy Code.

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  • The Bankruptcy Strategist

    Third Circuit Allows Repossessing Secured Lender to Hold Collateral Pending Bankruptcy Stay

    Michael L. Cook

    “[A] secured creditor [has no] affirmative obligation under the automatic stay to return a debtor’s [repossessed] collateral to the bankruptcy estate immediately upon notice of the debtor’s bankruptcy,” the U.S. Court of Appeals for the Third Circuit held on Oct. 28, 2019 in In re Denby-Peterson.

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  • The Bankruptcy Strategist

    Sympathy for the Debtor? Not When It Comes to Student Loans

    Rudolph J. Di Massa Jr. and Jarret P. Hitchings

    The assumption that bankruptcy can’t relieve a borrower of student loan obligations is incorrect, however a debtor must provide compelling evidence that an undue hardship will result if the debtor is required to repay the loan.

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  • The Bankruptcy Strategist

    ‘Dirt for Debt’ In Bankruptcy Plans of Reorganization

    Peter Janovsky

    A debtor’s goal in a Chapter 11 Bankruptcy is to confirm a “plan of reorganization.” Creditors usually have the right to vote for or against a plan, and in some cases, a plan can be confirmed over the objection of one or more classes of creditors. This is called a “cram-down.” The Bankruptcy Code’s rules governing cram-down are complex and differ for secured and unsecured classes of creditors. This article shows how bankruptcy courts have ruled on a particular method of cram-down known as a “dirt-for-debt” plan.

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  • The Bankruptcy Strategist

    Cannabis Businesses In Bankruptcy

    Aaron R. Cahn

    Any Cannabis-Related Business or Any Business In a Relationship With One Will Likely Find Itself Barred from the Door of the Federal Bankruptcy Courts

    The ability to file a federal bankruptcy case is an important resource for struggling businesses. It is particularly important to start-up businesses in an emerging field, such as the production and marketing of cannabis-related products. It is precisely this resource, however, that is currently being denied to cannabis-related businesses.

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  • The Bankruptcy Strategist

    D&O Policy ‘Bankruptcy Exclusion’ Held To Be an Unenforceable ‘Ipso Facto’ Clause

    Mark D. Silverschotz

    The new decision is significant because lawsuits against former (and current) officers and directors of debtors commonly are brought, as here, by trusts established under plans of reorganization. Because insurance policies often are the only viable source of recovery for the claims asserted in such lawsuits, this decision potentially opens a pathway to creditor recovery in other similar matters.

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  • The Bankruptcy Strategist

    Faster, Shorter, Smarter, Better: Strategies for a New Era of Bankruptcy

    Chris Updike and Joseph Zujkowski

    Faster, Shorter, Smarter, Better

    Among other trends, practitioners are increasingly using pre-packaged and pre-negotiated cases, drafting clearer and more concise pleadings, employing smarter deposit management practices, and harnessing improved technology — strategies for a new era of bankruptcy.

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  • The Bankruptcy Strategist

    Same Class, Different Recoveries — No Bar to Plan Confirmation

    Francis J. Lawall and John Henry Schanne II

    Equal treatment of claims in the same class within a plan of reorganization is an important creditor protection in Chapter 11. However, is it possible to provide certain benefits to some creditors within a single class and not others without running afoul of the Bankruptcy Code? In a recent ruling on an issue of first impression, the U.S. Court of Appeals for the Eighth Circuit certainly made clear it thought so.

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  • The Bankruptcy Strategist

    Fifth Circuit Subordinates Claim for Deemed Dividends

    Michael L. Cook

    “… [P]ayments owed to a shareholder by a bankrupt debtor, which are not quite dividends but which certainly look a lot like dividends, should be treated like the equity interests of a shareholder and subordinated to claims by creditors of the debtor,” held the U.S. Court of Appeals for the Fifth Circuit.

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  • The Bankruptcy Strategist

    8th Circuit Affirms Dismissal of Lawsuit Attacking Approved Bankruptcy Sale

    Andrew C. Kassner and Joseph N. Argentina Jr. 

    Sales of substantially all of a debtor’s assets are commonplace in corporate Chapter 11 bankruptcies. The sale is supervised and approved by the Bankruptcy Court. Purchasers desire to know that if the sale is consummated, they will be protected from subsequent attacks on the sale and the sale process and presumably more bidders will participate, resulting in greater returns for the estates and creditors. Issues surrounding the finality of a bankruptcy sale were recently reviewed by the U.S. Court of Appeals for the Eighth Circuit.

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