Let us say that Old Corp. was founded in 1929 as an oil and gas exploration company, and that it later added other businesses, including chemicals. By the turn of the century, Old Corp. had immense “legacy” environmental and pension obligations that weighed upon profits. The chemical business languished with mediocre earnings while the oil […]
Your company’s loan agreement contains a waiver of the company’s right to file a bankruptcy case. Enforceable? No, for it contravenes public policy. Your company’s formation documents require that any bankruptcy filing be authorized in a certain manner (e.g., approval of a certain percentage of directors, partners, or members). Enforceable? Many such restrictions have been […]
Catherine, Jules, and Jim each founded and owned one-third of the company. The company thrived. The owners fell out, with Catherine on one side and Jules and Jim on the other. Lawsuits fly. Under a provision of the state corporation laws, Jules and Jim voted for the corporation to buy out Catherine. Simple resolution? No, for there were fights over valuation […]
Certain suppliers of agricultural goods get paid ahead of secured party, both inside bankruptcy and outside bankruptcy. The suppliers benefit from a federal statutory trust imposed to protect them from nonpayment. The goods involved are “fresh fruit and fresh vegetables of every kind and character” – and regulations set the limits on what qualifies. Suppliers […]
Editors’ Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to firstname.lastname@example.org and we will try to answer it.
Editors’ Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to email@example.com and we will try to answer it. QUESTION: Jack B. wrote in the other day, asking us to explain what a prepackaged bankruptcy is. ANSWER: Jay Goffman, Greg St. Clair, David […]