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The Bankruptcy Strategist
Authority to File Chapter 11: A Matter of Contract or Public Policy?
Steven B. Smith and Rachel Ginzburg
If you think public policy favoring the freedom to file a Chapter 11 trumps the freedom to negotiate specific restrictions to such a filing, think again.
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The Bankruptcy Strategist
Supreme Court’s Denial to Hear Student Debt Discharge Case Leaves Ambiguity
Joseph Pack and Jessey Krehl
With federal student loan forbearance set to expire at the end of September, many hoped the high court would provide, if not clarity, at least uniformity for the millions of Americans who currently are on the hook for student loans.
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The Bankruptcy Strategist
Abbreviated Name Makes UCC Financing Statement Defective
Rudolph J. Di Massa Jr. and Keri L. Costello
In In re Bryant, the U.S. Bankruptcy Court for the Middle District of Georgia determined that a lender’s UCC-1 financing statements were “seriously misleading” under the Georgia Commercial Code because the financing statements identified the individual debtor with his middle name abbreviated.
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The Bankruptcy Strategist
Sixth Circuit: Section 363 Sale Not ‘Free and Clear’ of Creditor’s Claims
Francis J. Lawall and Kenneth A. Listwak
Buyers generally assume that the multi-page “free and clear” order, which typically follows the sale hearing, will insulate them from any of the seller’s current (and often) future liabilities. However, that is not always the case.
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The Bankruptcy Strategist
Escape New York: Court Dismisses NRA’s Chapter 11 As Improper Tactic to Avoid New York’s Non-Profit Regulatory Scheme
Steven B. Smith and Silvia Stockman
This article explores the competing factors the Bankruptcy Court considered and the rationale underlying its decision to grant the drastic relief of dismissing the NRA’s bankruptcy case.
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The Bankruptcy Strategist
Obtaining Administrative Claim Status When Doing Business With a Debtor
By Andrew C. Kassner and Joseph N. Argentina Jr.
How is administrative claim status obtained in a bankruptcy case, and what risks does a service or goods supplier take by continuing to do business with the debtor after commencement of the bankruptcy case?
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The Bankruptcy Strategist
Trustee Rights and Obligations When Debtor’s Ch. 11 Case Converts to Ch. 7
Rudolph J. Di Massa Jr. and Drew S. McGehrin
U.S. Bankruptcy Court for the District of Delaware court held that a Chapter 7 trustee was bound by the pre-conversion actions of the debtors, and that the trustee would not be permitted to step into the shoes of the then-dissolved official committee of unsecured creditors to pursue certain causes of action.
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The Bankruptcy Strategist
Appellate Court Finds Plaintiffs’ Claims Under Section 362 Not Automatically Stayed
Rudolph J. Di Massa Jr. and Malcolm Bates
Parties holding potential claims against non-debtor third parties that are arguably “related to” the bankruptcy estate must weigh the risks and benefits of actively prosecuting such claims. The mere fact that a bankruptcy trustee could pursue such claims as property of the bankruptcy estate under Section 541 of the Bankruptcy Code will not be enough to argue that such claims are conclusively barred by the automatic stay.
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The Bankruptcy Strategist
Retail Lease Workout In Bankruptcy Trends Show ‘We’re All In This Together’
David Samole
Landlords and commercial tenants have proven savvy and mutually symbiotic. These entities learned quick lessons during the pandemic to sustain the landlord-tenant relationship on adjusted footing or otherwise to provide an agreeable runway for a lease exit minimizing the damage to landlords and tenants. Three workout trends reflect this changing landscape that “we are all in this together.”
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The Bankruptcy Strategist
Subordination Agreements: Enforcement and Reorganization Participation
Andrew C. Kassner and Joseph N. Argentina Jr.
What provisions in a subordination agreement can be enforced, and can the subordinated creditor participate in the reorganization process if there is no prospect it will receive any distribution as a result of being subordinated?
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The Bankruptcy Strategist
Third Circuit: Assertions of Sovereign Immunity Can Be Scrutinized In the Bankruptcy Context
Corinne Ball
In an era of increasing participation and regulation by various governmental agencies in businesses eligible for bankruptcy relief, the Third Circuit's decision in Venoco is an important development for assessing the extent to which a distressed business can address action by a governmental unit through a bankruptcy case.
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The Bankruptcy Strategist
Cross-Border Insolvency In Brazil: The UNCITRAL Model Law Dances to A Samba Beat
Nyana Abreu Miller and Raul Torrao
After years of debate, Brazil recently enacted legislation amending its bankruptcy statute and modernizing the Brazilian insolvency system.
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The Bankruptcy Strategist
Update on Business Bankruptcy Legal Fees and Professionalism
Michael L. Cook
A review of recent cases shows that poor billing judgment and unreasonable billing have been with us for decades.
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The Bankruptcy Strategist
When Does Content of a Debtor’s Bar Date Notice Satisfy Due Process?
Francis J. Lawall and Kenneth A. Listwak
The Third Circuit recently examined whether the content of a debtor’s bar date notice satisfied due process, so as to discharge unknown litigation creditors’ claims against the company after confirmation of the debtor’s Chapter 11 plan of reorganization.
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The Bankruptcy Strategist
There Is No Post-Confirmation True-Up of Projected Disposable Income In Subchapter V
Jonathan P. Friedland, Mark Melickian & Hajar Jouglaf
A large number of reported decisions interpreting Sub V have mostly addressed the eligibility threshold for a debtor to proceed under the new law. And legitimate questions will continue to present themselves. Such is the nature of most new (and even not-so-new) statutes.
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The Bankruptcy Strategist
PPP Loans and Small Business Debtors In Bankruptcy
Alison D. Bauer
At present, there remains no avenue for Chapter 11 debtors to receive PPP Loans during the course of the bankruptcy case. The limitation on PPP availability notwithstanding, other legislative changes have greatly enhanced the eligibility for and efficacy of bankruptcy relief for many small businesses.
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The Bankruptcy Strategist
Employment Law Considerations In Bankruptcy
Wendy Johnson Lario, Alan Brody and Scott Humphreys
This article addresses some of the relevant employment laws and litigation vulnerabilities that companies, including their owners, officers and directors, should consider before ceasing operations or filing for bankruptcy.
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The Bankruptcy Strategist
Fraudulent Transfer Claims In Claw Back Litigation
Melissa Davis and Grace E. Robson
This article focuses on the basics of fraudulent transfer claims and solvency analysis in the context of lawsuits where a plaintiff is seeking to recover payments made prior to the bankruptcy case being commenced, sometimes referred to as “claw back” litigation.
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The Bankruptcy Strategist
Just Say No: Discovery In Chapter 15 Bankruptcies Is Asymmetrical
Daniel Coyle
Chapter 15 specifically allows foreign representatives to conduct discovery in the U.S., but be wary of other entities that seek to distract and/or delay the Foreign Representative from the asset search.
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Commercial Leasing Law & Strategy
10 Tips for Navigating the Commercial Tenant Bankruptcy Process
Stephanie C. Lieb and Alexander Zesch
Retail, entertainment and hospitality have been hit particularly hard by government-mandated COVID-19 shutdowns. For many, the road ahead will end in, or lead through, bankruptcy. Bankruptcy law has a language of its own, making it challenging to navigate the process for everyone involved, including for the landlords of bankrupt businesses worried about missing rent payments.
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The Bankruptcy Strategist
Appellate Courts Split On Bankruptcy Ownership of Malpractice Claims
Michael L. Cook
Judicial hair-splitting, when applying state law to federal bankruptcy cases, creates only uncertainty.
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The Bankruptcy Strategist
Asserting the Common Interest Doctrine In Plan-Related Discovery
Francis J. Lawall and Marcy J. McLaughlin Smith
The common interest doctrine can be a powerful tool when used to block discovery of relevant and sometimes critical evidence. However, a determination of when it can be invoked requires a highly fact-intensive analysis.
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The Bankruptcy Strategist
How Does a Bankruptcy Litigator Move from One Law Firm to Another?
Earl M. Forte
Chapter 11 work can be episodic and uneven, and while litigation skills are essential, it is also quite specialized. So, given these qualities, how does a bankruptcy litigator go about moving from one law firm to another, and what are the pitfalls?
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The Bankruptcy Strategist
What a Post-COVID-19 World: Debtors’ Extraordinary Responses to COVID-19
Gerard S. Catalanello and Kimberly J. Kodis
The impact of the pandemic rages on and, in its path leaves many businesses and industries demolished or, at best, severely impaired. Once again, the Bankruptcy Code has been called upon to provide relief to those in dire need
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The Bankruptcy Strategist
ABCs As an Alternative to Bankruptcy for Implementing Distressed Transactions
David S. Kupetz
Companies suffering financial distress frequently reach a crossroads where they need to either implement some type of transaction or will be forced to liquidate. In developing a plan for moving forward, management should evaluate and determine, with appropriate input from outside experts, feasible alternatives.
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The Bankruptcy Strategist
Consumer Bankruptcies In 2021 Can Benefit Both Client and Practitioner
Joshua Denbeaux, Lee M. Perlman and Heidi Spivak
As in past times of economic turmoil, it is anticipated that there will be a surge in residential foreclosures, debt collection activity, and the resultant wave of consumer bankruptcy filings.
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The Bankruptcy Strategist
Perfecting Notice and Saving $$
Tinamarie Feil
The number one goal to save money while perfecting notice should be elimination of the production and mailing of paper notices while expediting notice delivery and eliminating postage costs.
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The Bankruptcy Strategist
U.S. Supreme Court Allows Repossessing Secured Lender to Hold Collateral Pending Bankruptcy Stay
Michael L. Cook
A secured lender’s “mere retention of property [after a pre-bankruptcy–repossession] does not violate” the automatic stay provision of the Bankruptcy Code, held a unanimous U.S. Supreme Court in City of Chicago v. Fulton.
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The Bankruptcy Strategist
Shielding Retainer Fees Prior to Client’s Bankruptcy
Milton Williams and Christopher Dioguardi
Which type of retainer agreement gives attorneys the best chance to preemptively shield their retainer fees before a client ends up in bankruptcy or the Department of Justice seizes and forfeits the client’s assets?
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The Bankruptcy Strategist
Privacy Issues In Bankruptcy Proceedings
Stephanie Skaff, Sushila Chanana and Ashleigh Nickerson
Due to the COVID-19 pandemic, some businesses are considering potential liquidation or restructuring through bankruptcy. Companies in this situation should keep privacy concerns in mind, because the handling of personal data in bankruptcy proceedings poses some unique challenges.
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The Bankruptcy Strategist
Pandemic Forces Small Restaurants to Make Tough Bankruptcy Choices
Andrew C. Kassner and Joseph N. Argentina Jr.
Perhaps no sector has been more challenged from the COVID-19 pandemic than the restaurant industry. And, as is often the case, these difficult situations and the resulting tough choices must be addressed in the bankruptcy system.
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The Bankruptcy Strategist
Important Amendments to the Bankruptcy Code In the Consolidated Appropriations Act
Richard F. Broude
A preview of an update to the book Reorganizations Under Chapter 11 of the Bankruptcy Code that covers The Consolidated Appropriations Act that was enacted in December.
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The Bankruptcy Strategist
The Small Business Reorganization Act: How It Started. How it’s Going. Where to Next?
Jack O’Connor
By further expanding access to a streamlined Chapter 11 process, the SBRA will ensure that a wider array of debtors have the ability of reorganizing themselves, when Chapter 11 was previously too cost-prohibitive for such debtors.
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The Bankruptcy Strategist
State High Court Preserves Lenders’ Tort Claims Against Debtors’ Insiders
Michael L. Cook
A lender’s state law tort claims against “non-debtor third-parties for tortious interference with a contract” were “not preempted” by “federal bankruptcy law,” held the New York Court of Appeals.
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The Bankruptcy Strategist
Implications of Transfer of Attorney-Client Privilege In Bankruptcy Cases
Andrew C. Kassner and Joseph N. Argentina Jr.
One of the most misunderstood areas of law for non-bankruptcy and bankruptcy attorneys alike is the attorney-client privilege, including the scope of the privilege, who holds it, and when and by whom it can be waived. As is often the case, in bankruptcy, additional complexities arise.
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The Bankruptcy Strategist
Bankruptcy Court Responses to COVID-19 Relief Orders
Richard Levy Jr.
The economic impact of COVID-19-related shutdown orders, and the governmental directives, raise questions of how bankruptcy courts will respond.
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The Bankruptcy Strategist
Turn that Frown Upside Down
Jonathan Friedland and Hajar Jouglaf
Using Subchapter V’s Unlimited Debt Limit & Confirmation Requirements to Eradicate Personal Guarantees
Limitations to Subchapter V suggest that it will be of no use to all but very small companies, but before turning completely away from the topic, there are other considerations in play.
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The Bankruptcy Strategist
Transportation Services Agreements At Risk in Chapter 11 Proceedings
Francis J. Lawall and Patrick M. Ryan
In 2020, we’ve become all too familiar with the struggles of the gas and oil producers upon which many of our most popular industries rely. The resultant surge in restructuring activities, including Chapter 11 proceedings, among gas and oil producers is the highest in years.
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The Bankruptcy Strategist
Tenth Circuit Ruling May Impact Treatment of Student Loans In Bankruptcy
Charles M. Tatelbaum, Christina V. Paradowski and Brittany L. Hynes
A recent ruling in the U. S. Court of Appeals for the Tenth Circuit represents a significant departure from the generalized belief that student loan debts cannot be discharged in bankruptcy, and which, if followed by other circuit courts, could have a dramatic impact on bankruptcy law.
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The Bankruptcy Strategist
Bankruptcy Courts Embracing Virtual ADR
Jeffrey T. Zaino
Bankruptcy courts are embracing virtual alternative dispute resolution (ADR) processes to handle cases during this extraordinary period. Engaging in online mediation, and arbitration, can expedite Chapter 11 cases toward an equitable conclusion for the parties involved, while ensuring everyone can practice safe social-distancing.
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The Bankruptcy Strategist
Time Is Running Out On Restructuring Under New Subchapter V
Jerrold L. Bregman
The clock is ticking for small businesses to take advantage of a new way to restructure under Chapter 11 of the Bankruptcy Code. New Subchapter V — part of the CARES Act — is set to expire early next year.
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The Bankruptcy Strategist
Treatment of Straddle Year Federal Taxes in Bankruptcy Cases
Andrew C. Kassner and Joseph N. Argentina Jr.
When does a tax liability claim arise in a bankruptcy case? The issue was recently addressed by the U.S. District Court for the District of Delaware which ruled that federal income taxes for the year in which a debtor files for bankruptcy are entitled to priority treatment as administrative expenses when the end of the taxable year occurred after the bankruptcy petition date.
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The Bankruptcy Strategist
Nondischargeability Judgment Requires Willful and Malicious Injury Under Section 523(a)(6)
Rudolph J. Di Massa Jr. and Keri L. Costello
In re Smith
The Bankruptcy Appellate Panel for the Tenth Circuit recently joined the majority of circuit courts of appeals in finding that a creditor seeking a judgment of nondischargeability must demonstrate that the injury caused by the prepetition debtor was both willful and malicious under Section 523(a)(6) of the Bankruptcy Code.
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The Bankruptcy Strategist
Cash Flows for Bankruptcies During COVID-19
Jonathan Koevary and Robert Gagne
Chapter 11 petition strategy will almost invariably require and depend upon cash flow for continued use of leased stores and restaurants. To say the least, for those companies that filed for bankruptcy on the eve of the COVID-19 shutdowns, the strategies — and available cash flows to pay landlords — did not go as planned.
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The Bankruptcy Strategist
COVID Shutdown Orders v. Statutory Rent Obligations
Brett S. Theisen and Mark B. Conlan
Even though payment of post-petition rent under a nonresidential lease (prior to rejection) has historically been an absolute requirement, bankruptcy courts, as courts of equity, have the ability during these extraordinary times to take a more flexible approach.
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The Bankruptcy Strategist
What’s In Store for Bankruptcy Reform In a Biden Presidency
Mette H. Kurth and Dan Mette
Senator Elizabeth Warren has been relentlessly pursuing bankruptcy reform for two decades. And Joe Biden has adopted her comprehensive proposal. The proposals could impact commercial bankruptcy law and reverberate across our financial systems.
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The Bankruptcy Strategist
Unforeseen Consequences for Bankruptcy Practice In CARES Act
Sourav Chaudhuri and Gregory Plotko
This article highlights several of these outcomes and discrepancies of the CARES Act stimulus package, including how accepting crisis funding could lead to a company becoming more distressed, how bankruptcy courts are inconsistently ruling on the ability for Chapter 11 debtors to receive PPP loans and how changes to the Bankruptcy Code altered the rights of equity holders and debtholders.
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The Bankruptcy Strategist
Bankruptcy and Intellectual Property Executory Contracts
Michael H. Strub Jr.
The economic impact of the pandemic has been catastrophic. For many companies, intellectual property are significant assets, and counsel for these businesses, as well as counsel for their creditors, licensees and licensors, will need to understand these issues that arise to avoid pitfalls and take full advantage of opportunities to exploit the full value of a company’s IP for the benefit of their clients.
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The Bankruptcy Strategist
COVID-19 Related Governmental Shut Down Order Triggers Force Majeure Provision In Restaurant Leases
Marisa L. Byram
While commercial leases and the force majeure clauses contained in such leases vary widely, a recent decision from the United States Bankruptcy Court for the Northern District of Illinois may provide guidance to parties and help them to resolve similar disputes without resorting to the courts.
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The Bankruptcy Strategist
Do COVID-19 Rent and Eviction Protections Just Delay Inevitable Bankruptcy?
Dana Delman and John Vukmanovic
In attempts to alleviate the impact of job losses and business disruption due to COVID-19, state and local governments have passed emergency orders and regulations temporarily prohibiting evictions and extending deadlines to pay rent, among other restrictions. When those restrictions are lifted, there is no guarantee that they will have done more than delay the inevitable: eviction and bankruptcy.
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