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Business Bankruptcy

Be Careful What You Ask For: The Unintended Consequences of Creditor Remedies in Bankruptcy Cases

To anyone practicing bankruptcy law more than a month, the scenario of a lender secured by a lien against real property, as well as an assignment of rents (“AOR”) is pretty standard fare. Default on the debt occurs, threats (and counter threats) are tossed about, notices of foreclosure are filed (and perhaps receivership proceedings were […]


Beneath the Surface: Understanding Income Statements

An income statement, one component of a set of financial statements, provides a snapshot of a company’s profitability over a specific period of time by deriving net income from sales. While an income statement may help its user obtain a general sense of whether the company was profitable or not, it should not be relied […]


An Introduction to Bankruptcy Claims Trading

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 if they will ultimately recover […]


A Creditors’ Guide for Claims Against Bankrupt Customers: Getting Claims Paid and Preventing Claw-Back of Payments Received

You recently shipped goods to a U.S. customer on credit.  Now the customer is insolvent and evidently sliding into bankruptcy.  As in baseball, at the close of the slide, the customer may be safe, continuing in business or sold as a going concern, or out, and facing liquidation. What to do? Included among the concerns […]


Creditors’ Committees in Chapter 11 May Be Under Attack

The Delaware Bankruptcy Court has ruled that professional fees are not limited to the amount of the “carve-out” approved as part of a post-petition financing order. In In re Molycorp, Judge Sontchi ruled that counsel fees, which are otherwise approved by the court, must be paid to confirm a plan of reorganization—even if the approved […]


Corporate Restructuring 2017: Why Some Attorneys See Rising Rates, but Most Don’t

THE CORPORATE RESTRUCTURING profession has become, much like the broader economy, increasingly a world of few “haves” and many “have nots.” This is not by accident, and it is not going away. Those who see and accept the industry for what it is—and pivot accordingly—will continue to be winners. Those who possess a limited repertoire […]


Reclamation of Reclamation Claims by the Delaware Bankruptcy Court in Reichhold Holdings

Everybody knows that the dice are loaded:  reclamation rights are illusory in bankruptcy cases.  Where a supplier ships goods to a company that later files for bankruptcy, section 546(c) of the Bankruptcy Code provides reclamation remedies (i.e., supplier getting the goods back) under certain circumstances (there are time limits, etc.) if the supplier has such […]


Life Partners Holdings – A Viatical Settlement Scheme Comes Crashing Down (Part 1)

If you are already familiar with the Life Partners Holdings debacle, you may think that the term “Life Partners” should stand for Brian Pardo and his partners in crime who ran that notorious company serving life sentences (instead of just paying massive fines and having some of their assets seized). Such criminals’ loss of liberty may […]


Corporate Debtors’ Attorney-Client Privilege In the Hands of the Bankruptcy Trustee

Imagine if every secret and strategy that you had ever shared with your attorney were laid open for the world to see.  A trustee in a business bankruptcy case may well have the power to review, publish, and wield all of the debtor’s attorney-client privileged communications—including those communications which the debtor’s principals reasonably believed were […]


Supplier! Can Your Unpaid Administrative Claim Be Setoff Against Your Preference Liability?

A sophisticated Supplier sells “meat products” (yum) to a struggling manufacturer (in this case, of food). The manufacturer files a petition to commence a chapter 11 case. The manufacturer (and now debtor-in-possession or Debtor) wants Supplier to continue to supply. Supplier recognizes that it received $13 million in payments in the 90 days before the bankruptcy […]


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