Business Bankruptcy
“Bankruptcy filings are mounting. And that’s just the tip of the iceberg” – – – A Dissection & Analysis
[Editor’s Note: This is a republished article. The original article was published on LinkedIn on September 20, 2020.] There has been a significant uptick in the number of articles appearing in mainstream media (e.g. newspapers) about the wave of bankruptcies that has already started to appear. One article (linked here), authored by Matt Egan […]
Potential Pitfalls and Opportunities in Healthcare Restructuring
How Unique Issues in Healthcare Restructuring Set It Apart from Corporate Restructuring Over the past decade, arguably no industry experienced such dramatic regulatory change or consistent legislative uncertainty as healthcare. Today, continued efforts to repeal, defund, replace, or amend the Affordable Care Act—coupled with rising pharmaceutical costs, increased competition, massive capital investment expenses, etc.—virtually […]
An Introduction to Bankruptcy Claims Trading
A Primer on the Bankruptcy Claims Marketplace Upon the filing of a bankruptcy petition by a debtor in a U.S. chapter 11 proceeding, any attempts to collect debt by a creditor are halted. As a result, creditors face the daunting prospects of either waiting out the debtor’s bankruptcy case—not knowing when, how much, or even […]
A Non-Debtor Perspective on Executory Contracts
A Non-Debtor’s Rights in the Treatment of Executory Contracts Among the most powerful and best known tools that the Bankruptcy Code provides a debtor is the ability to reject burdensome contracts or to assume (and potentially assign) valuable contracts. From the perspective of non-debtor counterparties to such contracts, it may seem that the […]
The Northwest Company LLC – Court Rejects Debtors’ Choice of Successful Bidder, Names Formerly Back-Up Bidder Ashford as Auction Winner
August 25, 2020 – In an unusual twist to an unusual asset sale process, the Court hearing the Northwest Company cases approved the $31.46mn sale of the Debtors’ assets to Ashford Textiles, LLC and Ashford Partners, LLC (together, “Ashford” or “Purchaser”) [Docket No. 301]. The asset purchase agreement (the “APA”) governing terms of the sale […]
Kuney’s Corner: The Many Fates of Intercreditor Agreements
Potential Outcomes of Intercreditor Deeds Secured creditors often seek agreement among themselves in order to limit intercreditor conflict and expedite fulfillment of their respective claims against a borrower in a Chapter 11 case. One might call it a “strength through peace” approach. However, in Chapter 11 cases, some courts have ignored intercreditor agreements in […]
Legacies of the Jevic Case: Structured Dismissals Three Years after the Fall
Revisiting the Jevic Case and the Absolute Priority Rule In the familiar scenario, a highly-leveraged debtor files for Chapter 11 bankruptcy and an asset sale takes place. The lender is paid (in whole or in part), but either way, there is not enough cash left over to fund a plan confirmation process, which requires […]
90 Second Lesson: First Step Before Buying a Distressed Business
How Types of Sales Affect the Purchase of a Distressed Business Editor’s Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to [email protected] and we will try to answer it. Question What is the first integral decision a buyer must make […]
Force Majeure, MAC Clauses & COVID-19: A Court Speaks to Every Commercial Tenant in the United States
Why You Should Include a Force Majeure Clause in Lease Agreements The Northern District of Illinois delivered a victory last month for a tenant who could not operate its leased space as contemplated at the time it entered into the lease (and as it had been operating up until COVID-19), because continuing to […]
Limiting Credit Bidding in Section 363 Bankruptcy Sales Post-In Re Aéropostale, Inc.
Chilled Credit Bidding and the Section 363 Sale Section 363(k) of the Bankruptcy Code (the “Code”) allows a secured creditor to bid at a section 363 sale and use the amount of their claim to offset the purchase price at the sale, called “credit bidding.” A court may limit this right “for cause.” The […]