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The Bankruptcy Strategist
Landmines In Bankruptcy Appellate Practice, Part III
Michael L. Cook
When courts have made important exceptions in the past year, they have either added a gloss on the Judicial Code, corrected lawyers’ errors, filled in statutory gaps, or clarified the relevant statutory language.
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Commercial Leasing Law & Strategy
Exploring Debt Restructuring Options for CRE Owners
Michael Criscito
In the dynamic landscape of real estate, commercial real estate owners often find themselves facing financial challenges that necessitate a strategic approach to debt management. In such cases, exploring debt restructuring options becomes a crucial consideration.
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The Bankruptcy Strategist
A Strategic Guide for Lenders to Navigate Anticipated Distressed Loan Fallout
Jay Steinman and Karina Leiter
The steps outlined in this article offer a strategic guide for lenders, empowering them to navigate the complexities of loan workouts and enforcement actions with resilience and foresight.
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The Bankruptcy Strategist
Third Circuit: Bankruptcy Code Mandates Appointment of Examiner In Chapter 11 Cases
Francis J. Lawall and Brenden S. Dahrouge
The Third Circuit recently held in 'In re FTX Trading' that the plain text of Section 1104(c)(2) mandates the appointment of an examiner under the specified conditions set forth. As a result, the FTX decision will carry significant implications for large and medium-sized bankruptcy cases.
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The Bankruptcy Strategist
Bankruptcy Court Ruling of Cannabis-Related Claims Not Violation of Controlled Substance Act, California District Court Rules
Lawrence J. Kotler and Ryan Spengler
The Central District of California court held that a bankruptcy court’s administration of cannabis-related state court claims against a debtor’s estate is not a violation of the Controlled Substances Act.
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The Bankruptcy Strategist
Analysis of Recent Real Estate Sector Bankruptcy Rulings
Andrew C. Kassner and Joseph N. Argentina Jr.
Analysis on distressed real estate cases that present different issues. One involves the debtor’s sale of real estate over the objection of the secured lender. The other involves a debtor’s attempt to enjoin a construction bond company from continuing to pay claims by subcontractors after the filing of the bankruptcy case.
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The Bankruptcy Strategist
Landmines In Bankruptcy Practice, Part II
Michael L. Cook
By enforcing deadlines strictly, refusing to hear appeals from interlocutory orders, and rarely bypassing the district court for direct appeals, appellate courts have generally avoided what they view as unnecessary work and delay. But a few courts have made important exceptions in the past year.
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The Bankruptcy Strategist
DE Bankruptcy Court Decision Provides Reminder of Potential Consequences of Violating the Automatic Stay
Mark E. Felger and Simon E. Fraser
An opinion from the U.S. Bankruptcy Court for the District of Delaware provides a reminder of the potentially severe punishment that a party can suffer as a result of its violation of the automatic stay of Section 362 of the Bankruptcy Code, even if the debtor does not suffer any actual damages as a result of the violation.
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The Bankruptcy Strategist
Could Mass Tort Bankruptcies Fall Apart in 2024?
Amanda Bronstad
Mass tort bankruptcies took some big hits in 2023, with two of them dismissed outright, and two more potentially hanging in the balance.
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The Bankruptcy Strategist
SCOTUS Looks for Remedy to Its Bankruptcy Fee Congressional Overstep Ruling
Jimmy Hoover
The U.S. Supreme Court on January 9 debated the proper remedy for its 2022 ruling that Congress violated the Constitution when it imposed steep bankruptcy fee hikes on large debtors in some districts but not others.
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The Bankruptcy Strategist
Top Bankruptcy Partners Rates Are Climbing
Dan Roe
The trend of above-average rate increases began during the pandemic.
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The Bankruptcy Strategist
Three Things Trustees Should Know About Due Diligence in Preference Litigation
Brad Jones
Courts have struggled with the interpretation of the 2019 amendment to Section 547, specifically whether the due diligence requirement is an element of a preference claim that must be adequately pleaded in the plaintiff’s complaint. While the law is still developing, there are three important takeaways for trustees to consider.
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The Bankruptcy Strategist
Split Second Circuit Narrows Bankruptcy Code’s Settlement Payment Safe Harbor
Michael L. Cook
The majority was sensibly concerned with the possible structuring of leveraged buyouts by artful counsel who would use a financial institution as a “mere conduit” to exploit the Code’s safe harbor.
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The Bankruptcy Strategist
Distressed Real Estate Bankruptcies Continue, Despite Interest Rate Peak
Andrew C. Kassner and Joseph N. Argentina Jr.
Although interest rates may have peaked, we continue to expect a large volume of distressed real estate debtors to utilize the bankruptcy system over the next couple of years. This article analyzes two recent decisions regarding distressed real estate bankruptcies, both of which involve rights of real estate lenders against proceeds of collateral other than the real estate itself.
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The Bankruptcy Strategist
To What Extent Does a Bankruptcy Court Have Jurisdiction Over a Post-Confirmation Lawsuit?
Lawrence J. Kotler
In the recent decision of Tew v. ED&F Man Capital Markets, the U.S. Bankruptcy Court for the Eastern District of Kentucky addressed a thorny decision for all bankruptcy courts, namely to what extent a bankruptcy court has jurisdiction over a post-confirmation lawsuit.
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The Bankruptcy Strategist
Following Uptick In 2023, Bankruptcy Lawyers Are Expecting a Busy 2024
Alexander Lugo
Predictions of an uptick in bankruptcy filings came true this year, and bankruptcy lawyers are expecting a steady continuation into 2024, with the use of alternative approaches continuing to increase.
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The Bankruptcy Strategist
The Bankruptcy Strategist Is Going Digital Only. Here’s What You Need to Know.
Steve Salkin
The final print edition of The Bankruptcy Strategist will be our January issue.
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The Bankruptcy Strategist
Litigation Finance Offers Significant Benefits for Restructuring Matters
Jeffery Lula
In today’s volatile economic climate, companies need to be more creative to find ways to mitigate risk. Litigation finance is one of those out-of-the-box solutions that can provide benefits.
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The Bankruptcy Strategist
Key Win Likely for Commercial Shopping Center Lessor In Second Circuit
Michael L. Cook
The Second Circuit, on remand from the U.S. Supreme Court, further remanded to the district court the key issue of whether the Chapter 11 debtor gave “adequate assurance of future performance of” a commercial real property shopping center lease “as required by [Bankruptcy Code] §365(b)(3)(A),” after the debtor’s assignment of its lease.
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The Bankruptcy Strategist
CA Bankruptcy Court Throws Regulatory Concerns Aside and Sides With Cannabis Business’ Chapter 11 Plan
Lawrence J. Kotler and Ryan Spengler
While this case does not fully open the courthouse doors to cannabis-related businesses and seemingly grants the bankruptcy courts a great deal of discretion when ruling on similar cases in the future, cannabis-related businesses may now have a roadmap to pursue reorganization.
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The Bankruptcy Strategist
Fifth Circuit: Pre-petition Payout of Insurance Proceeds Should Be Classified As a ‘Transfer of An Interest’
Francis J. Lawall and Brenden S. Dahrouge
In upholding the bankruptcy court’s determination that the payment of insurance proceeds could be such a transfer, the Fifth Circuit underscored the complex interplay between state law, bankruptcy law and the rights of creditors in bankruptcy proceedings.
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The Bankruptcy Strategist
A Look Inside the Rulings for Sandy Hook Families In Alex Jones Bankruptcy
Ross Todd
A Q&A with the team working on the Alex Jones/Sandy Hook case in bankruptcy court in Texas, who provides an inside look at the case, their strategy, and some takeaways.
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The Bankruptcy Strategist
Online Extra: WeWork Creditors Likely to Attempt to Pierce Corporate Veil In Bankruptcy Court
Emily Saul
WeWork’s Chapter 11 bankruptcy has stayed a Manhattan Commercial Division decision allowing plaintiffs to dig around in 11 years of the tanked company’s finances — but observers say it’s likely creditors will now try to pierce the corporate veil in the bankruptcy proceeding.
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The Bankruptcy Strategist
Landmines In Bankruptcy Appellate Practice
Michael L. Cook
Pundits are raving about the current increase in business bankruptcy cases. But they rarely, if ever, mention the spike in bankruptcy appeals. A brief survey of recent decisions shows that appellate courts are, among other things, finding ways to (a) avoid making decisions or to (b) avoid litigation delay and uncertainty by expediting appellate review. Practitioners can avoid surprises by grasping what these courts are actually doing.
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The Bankruptcy Strategist
Appointment of Receiver Under State Law No Assurance Receiver Will Stay If Ch. 11 Filed
Andrew C. Kassner and Joseph N. Argentina Jr.
Many clients are not aware that the Bankruptcy Code provides that, upon the filing of a bankruptcy case, the receiver is required to give back possession of the mortgaged property to the debtor unless the lender obtains an order from the Bankruptcy Court excusing the receiver from this requirement.
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The Bankruptcy Strategist
With Interest Rates On the Rise, Reinstatement Will Again Become An Attractive Restructuring Strategy
Stephen Selbst, Steven Smith and Luc Pierre-Louis
To formulate a reinstatement plan that will survive challenges, debtors and creditors should heed the lessons from two high-profile reinstatement cases from the Southern District of New York that were decided just months apart: Charter Communications and Young Broadcasting.
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Commercial Leasing Law & Strategy
Rite Aid Rejects 168 Store Leases As Part of Bankruptcy
Jack Rogers
Unable to absorb the potential cost of federal, state and private lawsuits over allegations that it, along with other drugstore chains, oversupplied prescription painkillers, Rite Aid filed for bankruptcy protection in September.
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The Bankruptcy Strategist
DIP Financing and Liens On Avoidance Actions
Michael L. Cook
The Eighth Circuit's decision in Simply Essentials has practical significance for Chapter 11 debtor in possession (DIP) lenders. U.S. Trustees and unsecured creditors regularly object to the granting of liens on avoidance actions, but this and other appellate rulings should now eliminate the purported legal obstacle.
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The Bankruptcy Strategist
Challenges Faced By U.S. Debtors Aiming to Qualify for Chapter 15 Recognition
Richard J. Bernard and Roya Imani
When restructuring or liquidating a non-U.S.-based company with U.S. operations, practitioners should consider the benefit and efficiency of utilizing the company’s home country laws under a foreign proceeding and a Chapter 15 in the United States.
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The Bankruptcy Strategist
Second Circuit: Notes Issued from Syndicated Loan Transaction Are Not Securities Under ‘Reves’ Test
Francis J. Lawall and Marcy J. McLaughlin Smith
In an important recent decision, the U.S. Court of Appeals for the Second Circuit reviewed a $1.7 billion syndicated loan and provided a helpful analytical framework for determining whether applicable securities laws were called into play.
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Commercial Leasing Law & Strategy
Pressing Issues for Landlords and Tenants In the Event of a WeWork Bankruptcy
Gregory Plotko and Marissa Higgins
This article discusses in substance the most pressing issues for both landlords and tenants in the event of a WeWork bankruptcy filing under the U.S. Bankruptcy Code.
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The Bankruptcy Strategist
Bankruptcy Court Rules Contract to Produce Documentary Was Not a Personal Services Contract
Andrew C. Kassner and Joseph N. Argentina Jr.
Bankruptcy courts continue to adjudicate disputes regarding Section 365 of the Bankruptcy Code, which addresses the disposition of executory contracts between the debtor and third parties. And we continue to report on developments in this area. Often the issue involves whether the contract is an executory contract that is subject to being assumed and assigned.
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The Bankruptcy Strategist
Bankruptcy Risk and Fraud In Cryptocurrency
J. Eric Wise
Among the risks of cryptocurrency exchanges are bankruptcy risk and fraud, including: the inalienability of account claims, holding an unsecured claim versus an entitlement to the return of coin, and bankruptcy preference risk.
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The Bankruptcy Strategist
Bankruptcy Court Says Bankruptcy Case Is ‘Filed’ When Uploaded, Not Stamped
Lawrence J. Kotler and Drew S. McGehrin
The U.S. Bankruptcy Court for the Southern District of New York summed up the importance of the determination as to when a bankruptcy case is actually filed of record, thereby triggering the imposition of the automatic stay and found that the “upload” time of a bankruptcy filing — and not the time physically “stamped” on a bankruptcy petition — determines when a case is commenced. In doing so, the Bankruptcy Court offered direction and guidelines that debtors and creditors will be well advised to observe in future cases.
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The Bankruptcy Strategist
Fourth Circuit Ruling Underscores Judicial Divide On Use of ‘Texas Two-Step’
Avalon Zoppo
A sharply divided U.S. Court of Appeals for the Fourth Circuit ruling shielding a nondebtor in bankruptcy proceedings from asbestos lawsuits underscores the wider and growing divide among judges across the country on the bounds of Chapter 11 protection and corporations’ use of the “Texas two-step” to address mass tort litigation.
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The Bankruptcy Strategist
Novel Issues of Chapter 11 Mass Tort and Complex Claims Cases Impact Claims Against Unrelated Debtors
Francis J. Lawall and Brenden S. Dahrouge
Chapter 11 cases involving mass tort and complex personal injury claims often require the resolution of novel legal issues that stretch the bounds of existing precedent. As these cases evolve, they can also impact claims against other debtors unrelated to the case at hand through court-approved injunctions, releases or settlements.
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The Bankruptcy Strategist
After Dismissal of J&J’s Second Talc Bankruptcy, Plaintiffs Lawyers Call for Consolidated Trials
Amanda Bronstad
With the dismissal of Johnson & Johnson’s second talc bankruptcy, plaintiffs lawyers are doubling down on their plans to pursue trials across the country.
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Commercial Leasing Law & Strategy
Distressed Investors Should Take Advantage of the Upcoming Plethora of Defaulted CRE Loans
Joseph J. Ori
What is different about this distressed cycle is that most of the lenders are not foreclosing and taking title to the CRE assets, managing, and leasing them for a few months and then selling the properties. They are more likely to sell the note/mortgage rather than foreclose on the property. This presents a unique and interesting opportunity for astute distressed investors, who are experienced in acquiring mortgage notes secured by commercial property and in the arduous foreclosure and bankruptcy process,
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The Bankruptcy Strategist
Evolution of Pre-Bankruptcy Planning Raises Questions of Good Faith
Andrew C. Kassner and Joseph N. Argentina Jr.
In recent years, as extensive pre-bankruptcy planning has evolved, bankruptcy filings frequently involve affiliates of larger companies, engineered with a structuring of liabilities in mind. The question of whether these targeted filings are for a legitimate bankruptcy purpose or should be dismissed has been the subject of significant high-profile litigation.
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The Bankruptcy Strategist
How the Texas Two-Step Changes How Plaintiffs Litigate Mass Torts
Mark Eveland
By enabling defendants to shield themselves from mass tort liability, the “Texas Two-Step” is a new obstacle for plaintiffs pursuing mass tort cases against manufacturers of dangerous products.
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The Bankruptcy Strategist
Could the $18.8M Talc Verdict Threaten J&J’s Bankruptcy Plan?
Amanda Bronstad
The verdict, which excluded punitive damages, could have been much larger. But the jury’s award has the potential to threaten the $8.9 billion settlement and, as a result, a proposed Chapter 11 reorganization plan in the bankruptcy of Johnson & Johnson’s LTL Management.
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The Bankruptcy Strategist
Second Circuit Affirms Slashing of Unreasonable Fees In Dismissed Involuntary Bankruptcy Case
Michael L. Cook
An involuntary bankruptcy petition is a limited, risky remedy for both creditors’ counsel and debtor’s counsel. The fee problems encountered by counsel for the petitioners and the putative debtor in this case provide a cautionary tale.
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The Bankruptcy Strategist
Second Circuit Sets Up Seven-Factor Test for Third-Party Releases In Bankruptcy Cases
Alan B. Morrison
The Second Circuit had a tough call to make in the Purdue Pharmacy bankruptcy appeal: What to do about the release given to the Sackler families who had agreed to contribute $5.5 to $6 billion to Purdue’s reorganization plan but were not themselves in bankruptcy.
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The Bankruptcy Strategist
Bankruptcy Court Highlights Pitfalls to Avoid When Retaining Experts
Francis J. Lawall and Marcy J. McLaughlin Smith
Simply because the expert is retained by counsel in anticipation of litigation, does not automatically render all communications privileged.
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The Bankruptcy Strategist
Bankruptcy Judge Dismisses 3M Unit’s Earplug Case, Concluding It Had No ‘Valid Reorganization Purpose’
Amanda Bronstad
U.S. Chief Bankruptcy Judge Jeffrey Graham found that 3M subsidiary Aearo Technologies, which is financially solvent, had no “valid reorganization purpose” to file for Chapter 11 protection last year.
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The Bankruptcy Strategist
Delaware Bankruptcy Court Provides Guidance On Drafting Proxies
Robert B. Greco
Proxies in voting and support agreements, secured debt instruments, and other corporate documents should be drafted in a manner that fully reflects the intended scope of the parties’ proxy relationship.
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Commercial Leasing Law & Strategy
Third Circuit: Pre-Bankruptcy Commercial Lease Termination Not Fraudulent Transfer
Michael L. Cook
Is an insolvent debtor’s pre-bankruptcy termination of a commercial lease a fraudulent transfer? The circuit courts seem to be split, however a close reading of cases in the Third and Seventh Circuits shows that the reasoning of both courts can be reconciled on their facts.
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The Bankruptcy Strategist
Lease Terminations As Fraudulent Transfers
Michael L. Cook
Is an insolvent debtor’s pre-bankruptcy termination of a commercial lease a fraudulent transfer? The circuit courts seem to be split, however a close reading of cases in the Third and Seventh Circuits shows that the reasoning of both courts can be reconciled on their facts.
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The Bankruptcy Strategist
The Role of Third-Party Releases In Successful Chapter 11 Reorganizations
John J. Rapisardi and Jacob T. Beiswenger
Part Two of a Two-Part Article
In Part Two, we continue the analysis by evaluating two constitutional issues arising from third-party releases: whether creditor consent to be bound by a third-party release is required to satisfy the due process clause of the Fifth and Fourteenth Amendments; and whether bankruptcy courts have constitutional authority to issue final orders granting third-party releases in a plan of reorganization under Stern v. Marshall.
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The Bankruptcy Strategist
Fourth Circuit: Corporate Subchapter V Debtors Subject to Discharge Exceptions Under Bankruptcy Code
Lawrence J. Kotler and Elisa Hyder
In a matter of first impression not yet addressed by any circuit court, the Fourth Circuit addressed whether the discharge exceptions under Section 523(a) apply to corporate debtors under Subchapter V of Chapter 11 of the Bankruptcy Code.
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