Foreign Debtors in Chapter 11
Last month's article concluded with 'Surviving a Motion to Dismiss or Suspend,' which discussed the exact boundaries of international comity, and explained that these boundaries are not clear. Therefore, a court's decision on a motion to dismiss or suspend a non-U.S. debtor's bankruptcy case under section 305(a)(2) (which invokes the 304(c) factors) will depend heavily on the case's specific facts.
Test Your Expertise ' DIP Financing
For the reader who has been involved in more debtor-in-possession(DIP) financings than he or she can remember, please treat this article as the opportunity to impress yourself with just how much you know about it. Check off each category if you can truthfully say 'I knew that!' A sum of eight or more checks makes you a big dipper.
Lien Creation and Lien Perfection: What's the Difference?
It is generally understood that materialmen, contractors, subcontractors and others (collectively called 'contractors') who perform labor or furnish materials on construction projects are entitled under state law to assert a mechanics' lien against real property for the value of the labor or materials they provide. What is less clear is the effect of a bankruptcy petition that is filed before the contractor has taken the necessary steps to create or perfect its rights.
Sigh of Relief: Derivative Actions Safe for Now
Much to the relief of many in the Third Circuit, its long-awaited en banc ruling in the Official Committee of Unsecured Creditors of <i>Cybergenics Corp. v. Chinery</i>, (<i>en banc</i>) No. 01-3805 (May 29, 2003) disagreed with the decision of one of its panels and upheld the right of parties other than a debtor or trustee to pursue avoidance actions under the Bankruptcy Code on a derivative basis. In doing so, the court supported the well-established practice allowing these derivative actions, and eschewed a slavish plain-language interpretation of Section 544(b) in favor of a broader, multi-section reading.
Releasing the Albatross
In the context of large Chapter 11 cases, the resolution of disputed claims can often be the proverbial albatross around the neck of the debtor, delaying the closing of the debtor's case to the detriment of the debtor's estate.
The Effect of Bankruptcy on a Subchapter S Election
A new tax case from the U.S. Tax Court addresses the question of whether the filing of a Chapter 11 case by a Subchapter S corporation terminates the company's Subchapter S election. This case is important to the shareholders of a Subchapter S corporation that might have post-petition taxable income.
Protecting Executive Severance Claims
Amid the furor surrounding headline-grabbing scandals at corporate giants, the conduct of corporate executives is being scrutinized more closely than ever. Ushered in by the enactment of the Sarbanes-Oxley Act of 2002 (the Act), the era of "corporate accountability" has left many officers and directors worried about their potential exposure if a company struggling to remain profitable goes south during their tenure at the helm, regardless of the cause of the meltdown.
'Personal' Alter Ego Claims in Bankruptcy
Last month's article discussed the unfortunate fact that bankruptcy courts have made it virtually impossible for creditors to maintain individual alter ego claims against the debtor's shareholders and affiliates - and that as a result, crafting an alter ego claim that will survive an attack requires finesse. This month's article continues with a discussion of "personal" claims.
