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Business Bankruptcy

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 […]


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 […]


90 Second Lesson: How is a General Carve-Out Different than a Professional Fee Carve-Out?

Editors’ 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: Last month we explained what a professional fee carve-out is.  That caused a few readers to email and ask: how does a fee carve-out […]


90 Second Lesson: What is a “Professional Fee Carve-Out” in a Chapter 11 case?

Editors’ 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: A commercial banker emailed saying, “We’ve recently had a large asset-based loan default and the company filed Chapter 11.  Our attorney has advised […]


The “A&P” Chapter 22 Bankruptcy Saga—Anomaly or Canary in a Coal Mine?

A few months ago, on July 20, 2015, the Great Atlantic & Pacific Tea Company, more commonly known as “A&P,” made history by filing what we in the restructuring industry like to call “Chapter 22”—that is, a Chapter 11 restructuring bankruptcy part deux. A chapter 22 in and of itself is not that unique, but […]


“Don’t Pass Me By”—The Jevic Case and Bypassing the Absolute Priority Rule

It’s an all-too-familiar situation: a debtor files for chapter 11 bankruptcy and an asset sale takes place, but there is not enough money at the end of the day to fund a plan confirmation process, or adequately pay off all creditors who come first in line according to the bankruptcy code. That “line” is defined […]


There Ought to Be a Law, and There Is: When the Insolvent LLC’s Manager Distributes Cash But Does Not Pay Creditors

Editor’s Note: The scenario discussed below was present in many respects in Vieira v. Harris (In re JK Harris & Co. LLC), 512 B.R. 562 (Bankr. D. S.C. 2012). Let us suppose that a provider of tax resolution services to a large number of customers borrows cash secured by accounts receivable (the cash borrower can […]


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