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Business Bankruptcy

When Her Smile is a Thin Disguise—How to Stop a Lying Judgment Debtor from Obtaining a Bankruptcy Discharge

A recent decision by the Seventh Circuit Court of Appeals will make it much more difficult for debtors to get a bankruptcy discharge when they have lied or failed to give required information during a prior post-judgment collection proceeding. The opinion, cited as In re Marcus-Rehtmeyer, No. 14-1891 (7th Cir. Apr. 28, 2015) should enhance […]

The Oil & Gas Psychic Hotline: What the Future Holds for the Oil and Gas Market

Psychic hotlines were all the rage in the late 80s and early 90s. Cable television channels were littered with their advertisements. One wonders if the so-called “psychics” answering all those pay-by-the-minute phone calls could foretell their own futures—that revenues from people willing to incur exorbitant phone bill charges by the minute (without even getting any […]

More on Salon – Applying a Valuation in Bankruptcy

 Now, we return to our case study of Salon Media Group with an eye towards developing a thesis and applying valuation methodologies discussed in an earlier article in this series here. There are, as I mentioned in my previous article on Salon, large issues of concern with the current stock offering. Given that insiders have […]

RECOMMENDED READING: Not Necessarily Free and Clear IV: Antitrust Exposure of Purchaser of Assets From 363 Sale by Direct Competitor

Buying the assets of a competitor out of a section 363 bankruptcy sale?  This site has explained here and here how section 363(f) of the Bankruptcy Code empowers a court to order that assets sold under section 363(b) of the Code are, in the hands of the purchaser, “free and clear” of any “interests” in […]

Cram Downs and Artificial Impairments – Can a Debtor Rewrite its Own Credit Terms in a Bankruptcy?

It is a principle of credit lending that creditors should charge less in interest if they take on less risk, but can charge more interest (and thus make more profit) if they take on a greater risk. The “secured,” more “senior” creditors of a company (those whose debt is collateralized by some specific property that […]

RECOMMENDED READING: Executory Contracts that Cannot Be Assumed and Assigned Because Counterparty Cannot be Compelled to Accept Performance From an Assignee

A debtor has the power to assume and assign executory contracts even when those contracts expressly bar such assumption and assignment (see section 365(f) of the Bankruptcy Code).  Thus, the debtor may sell its interests under a contract over its counterparty’s objection.  This power may be very beneficial to a debtor in possession (and its creditors) […]

Not Necessarily Free and Clear III: Imposing Debtor’s Unemployment Insurance Ratings Onto Purchaser?

On April 30, 2009, Chrysler and 25 of its direct and indirect subsidiaries (collectively, “Old Chrysler”) commenced bankruptcy cases that became jointly administered.[i] Scarcely a month later, Old Chrysler sold its assets through a sale under section 363 of the Bankruptcy Code to a newly-formed entity that went on to do business as Chrysler (“New […]

ABI Commission Report on Chapter 11 Reforms—More Hope in Sight for the Little Guy?

Among a number of issues addressed by an American Bankruptcy Institute Commission tasked with making recommendations to the federal legislature regarding bankruptcy law was a subject that has been on the minds of many bankruptcy professionals over the last few years. It is also certainly a subject that has been on the minds of countless […]

Aereo, Inc.: A Chapter 11 Debtor That is Not Broke

The word bankruptcy is derived from Italian banca rotta, meaning “broken bench,” and may derive from the early modern Florentine custom of breaking a moneychanger’s bench to signify his insolvency and cease his operations.  Yet, as we explained earlier this year, a chapter 11 debtor need not be broke.  We summarized the law as follows: […]

RECOMMENDED READING: Tell the Tax Man How It Will Be – A Primer on Federal Tax Liens

In his article,“Secured Lender Primes Earlier Federal Tax Lien in Fourth Circuit Split Decision,” Michael L. Cook of Schulte Roth & Zabel presents a learned and immediately useful nutshell account of how federal tax liens work — in itself a major service to non-specialist legal and financial professionals.  Having provided that understanding, Cook shows how […]