Priority for Unpaid Workers' Comp Premiums
August 30, 2006
Priorities are the alchemist's stone of the Bankruptcy Code ' they have the power to turn worthless claims into pots of gold. Without priority status, unsecured claims typically receive little or no distributions from the bankruptcy estate. When these claims fall within one of the statutory priorities of ' 507(a) of the Bankruptcy Code, however, they often lead to significant distributions ' sometimes even payment in full. What often separates the 'haves' from the 'have-nots' in the bankruptcy arena is the ability to fit one's claim into the finite list of priorities set forth in ' 507(a).
Fiduciary Duties Owed to Subsidiary
August 30, 2006
On June 23, 2006, the jurisdiction that invented the 'zone of insolvency' delivered its latest lesson on the fiduciary duties of directors and officers of insolvent companies. The Delaware Bankruptcy Court, in <i>In re Scott Acquisition Corp.</i>, ___ B.R. at ____, 2006 WL 1731277 (Bankr. D.Del. 2006), ruled that directors and officers of insolvent subsidiary companies owe fiduciary duties to both its creditors and the subsidiary itself. Before this, leading cases on this issue held that fiduciary duties were owed only to creditors and the single-shareholder, parent companies. Though the decision stands on some firm legal ground, it is sure to create more uncertainty and doubt in the boardroom.
Postpetition Plan Support Agreements
August 30, 2006
The propriety of postpetition plan support agreements (aka 'lockup' agreements) has been the subject of considerable controversy since 2002 when Judge Mary Walrath of the U.S. Bankruptcy Court for the District of Delaware issued two unreported decisions announcing a 'bright-line' rule that such agreements are 'solicitations' within the meaning of ' 1125(b) of the Bankruptcy Code. In light of these rulings, parties seeking to memorialize a heavily negotiated consensus to support confirmation of a plan of reorganization have run the risk that any such consensus that is reduced to writing could be deemed a violation of ' 1125(b) unless it was accompanied by a prior court-approved disclosure statement. Furthermore, parties to such agreements also faced the significant risk that they could be disenfranchised from the Chapter 11 process through designation of their votes regarding the plan that they have agreed to support.
<b>Online Exclusive:</b> National Health Database Gets Boost from Bush Executive Order
August 29, 2006
This month, President Bush signed an executive order that will require federal agencies that 'sponsor or administer health programs' to adopt standards-based, interoperable recordkeeping systems for patient records, in order to facilitate electronic collection and analysis of information. Agencies affected include the Department of Health and Human Services, Department of Defense, Veterans Affairs, and the Office of Personnel Management, according to an announcement that accompanied the executive order.
Thelen Reid to Get Its China License
August 29, 2006
Thelen Reid & Priest will receive its license to practice in China at a ceremony in Beijing on August 30, a sign of thawing in what was seen as a freeze on the government issuing licenses to foreign firms.
CD: 10/3/06 - Integrating and Maximizing Business Development Training
August 24, 2006
Business development training requires a significant commitment of time and resources, and a vision of where participants in such a program want to be in their practice. A number of law firms have learned the hard way that simply providing a sales or coaching program does not necessarily guarantee results. Learn what it takes to implement the necessary strategies to get the most from your training efforts.
