Bankruptcy

In the case of In re Black Diamond Energy of Delaware, the U.S. District Court for the Western District of Pennsylvania provided insight regarding the “police and regulatory power” exception to the automatic stay set forth in 11 U.S.C. Section 362(b)(4).

A unanimous U.S. Supreme Court revived a personal injury lawsuit against a construction company, saying a federal appeals court was “too rigid” in applying a legal rule meant to ensure fairness in the judicial system.

In a closely followed venue dispute, the Bankruptcy Court for the District of New Jersey recently held that venue in the District was proper in the Chapter 11 cases of Multi-Color Corporation and its affiliates. The decision is significant because it offers an analytical framework for determining a debtor’s “principal assets” under section 1408 of the Bankruptcy Code.

In In re 33 Mako, the U.S. Bankruptcy Court for the Southern District of New York addressed the issue of whether an oversecured creditor may recover post-petition default interest under Section 506(b) of the Bankruptcy Code. In denying the debtor’s motion, the opinion offers meaningful guidance on the application of the five-factor equitable test used to evaluate default interest claims and clarifies how courts should weigh each factor.

Spirit Airlines’ shutdown was not merely another distressed-company filing, it was a real-time illustration of the limits of Chapter 11 in industries where value depends on uninterrupted operations, customer confidence, and constant liquidity.

The automatic stay that goes into effect when a bankruptcy petition is filed can be hard to process for someone who has been injured. The facts have not changed. The injury has not changed. But the path forward suddenly depends on a different court, applying a different set of priorities.

Heightened demand for liability management exercises and private credit transactions involving distressed companies are among the factors behind a series of lateral partner moves in the restructuring realm this month, according to firms that made recent hires.

The combination of increasing operating costs and uncertain government reimbursement funding continues to place health care providers under financial pressure, and in many cases, financial distress. Given the importance of Medicare/Medicaid funding of claims under provider agreements with the federal government, how courts interpret and apply the interplay between the Bankruptcy Code and Medicare Program Act determines the disposition of hundreds of millions of dollars of claims for reimbursement that support the health care system.