Empty Bankruptcy Win for Commercial Landlord
February 01, 2025
In In re Sears Holdings Corporation, the Second Circuit apparently ended a multi-year litigation by affirming the district court’s decision that the landlord’s appeal was “moot for lack of a remedy because, although [that] court [had properly] vacated the assignment and assumption of the lease …, the lease would not revert to [the landlord under Code] §365(d)(4), and that [the landlord] had no alternative remedy.”
Bankruptcy Code Can Present Significant Risks to Lenders
February 01, 2025
This article discusses two situations where a lender received payments and later was forced to disgorge them. These opinions illustrate two of the ways the bankruptcy code can present significant risks to lenders even after the lender receives payments in accordance with loan agreements or even a court order.
U.S. Trustee, Insurers, Object to J&J’s $10B Talc Bankruptcy Plan
February 01, 2025
The objections, filed ahead of a key hearing on whether to confirm the Chapter 11 plan, cite the Supreme Court’s decision in Harrington v. Purdue Pharma, which invalidated nonconsensual releases in the $6 billion bankruptcy plan granted to Purdue’s founders, the Sacklers.
New York Bankruptcy Judge Allows Case Against Crypto CEO to Move Forward
February 01, 2025
U.S. Bankruptcy Judge Martin Glenn of the U.S. District Court for the Southern District of New York ruled that a lawsuit, in which the plaintiff alleged that Alex Mashinsky, the founder and ex-CEO of Celsius Network, caused the insolvent crypto lender to incur billions of dollars in damages, can move forward because the terms of the agreement to stay stated that it would be lifted when the litigant’s criminal trial ended.
Three Things Trustees Should Know About Affirmative Defenses in Preference Litigation
January 01, 2025
Since 2019, courts have struggled with the interpretation of due diligence requirement 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.
Ninth Circuit: Fully Secured, Nonrecourse Creditors Qualify As ‘Countable’ Creditors
January 01, 2025
Addressing a matter of first impression, the bankruptcy appellate panel for the U.S. Court of Appeals for the Ninth Circuit recently held that fully secured, nonrecourse creditors qualify as “countable” creditors for purposes of determining the viability of an involuntary bankruptcy petition under Section 303(b) of the U.S. Bankruptcy Code.
Post-Petition Rent Obligations On ‘Residential’ Versus ‘Nonresidential’ Property
January 01, 2025
The lifeblood of any debtor operating in Chapter 11 is access to cash to maintain ongoing operations. This is particularly important in cases involving assisted living and skilled nursing facilities given the health, safety, and welfare concerns with respect to their residents. One of the most significant calls on cash involves post-petition rent obligations due on leased facilities.
