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Business Bankruptcy

When to Request Relief from the Automatic Stay

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: How do I know if I should request relief from a debtor’s automatic stay? ANSWER: What is the Automatic Stay? Section 362 of […]


The Mega RV bankruptcy settlement was a hard lesson for unsecured creditors

Mega RV: Unsecured Creditors Fall Short in Bankruptcy Settlement

An Unfortunate Case for Unsecured Creditors A settlement agreement in the Mega RV Corp. bankruptcy highlighted the interplay between an overzealous lender and a repentant business owner who came together to cooperate and provide a windfall recovery to unsecured creditors. Ultimately, through the machinations of the bankruptcy case, the settlement proved to be insufficient to […]


Debtor crams down plan like hammer on egg

Kuney’s Corner – Cram Down: When the Creditor Says ‘No’

The Legal Requirements to Cram Down a Plan on Creditors   By filing a chapter 11 petition, the debtor seizes the initiative in proposing a reorganization plan—which is to provide how soon, in what amount and in what manner creditors’ claims are paid.[i] But a debtor does not necessarily get its way. A class of […]


Property appraiser with clipboard in warehouse

Personal Property Appraisals 101

What You Should Know Before Hiring a Property Appraiser Are you a lender who needs an appraisal of personal property (machinery, equipment and inventory) in connection with making a loan? Are you a company that needs an appraisal in connection with a capital raise, or some other purpose? Regardless of the reason, there are some […]


Busts of famous leaders

The Chief Restructuring Officer: Architect, Force, Leader Towards Change

Navigating an Extreme Environment as CRO The position of Chief Restructuring Officer or CRO is not well defined or understood. This role does not have as much history as the more traditional positions such as CFO, CEO or President. In turn, this leaves room for much misunderstanding. The CRO may be thought of as simply […]


Men walking through inventory in warehouse

Buying Operating Assets from a Distressed Seller

A Practical Guide to Assessing Legal Risk and Potentially Fraudulent Transfers    “One man’s rubbish is another man’s treasure.” -William & Robert Chambers Journal of popular literature, science and arts (1879)  “A little learning is a dangerous thing” -Alexander Pope, An Essay on Criticism (1709)    Buying operating assets from a financially distressed seller can […]


Carve out from a block of wood

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

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 us that we should agree to pay the borrower’s attorneys by letting them get paid from the proceeds of the sale of our collateral. Can this possibly be right?” ANSWER: […]


Lightbulbs hanging in building

Demystifying Administrative Expenses in Bankruptcy

Priority Claims in Chapter 11 Bankruptcy   Bankruptcy professionals, other business professionals, and trade vendors would be reluctant to provide services or otherwise extend credit on an unsecured basis to an insolvent entity like a bankruptcy debtor, unless their claims to payment were somehow ensured. In addressing this predicament, Congress provided that holders of unsecured […]


Silhouette of prosecuted man

How To Become a Really Bad Bankruptcy Client And Maybe Even Get Prosecuted

Follow the Rules or Become a Bad Bankruptcy Client What makes a bad bankruptcy client? A failure to follow the rules. The Bankruptcy Code requires lots of things from people who file bankruptcy. One of those things is full disclosure of all assets, liabilities, and other details regarding the debtor’s financial circumstances. A failure to […]


Geishas walk with closed kimonos

Opening the Kimono: Operational and Financial Reporting Obligations at the Outset of a Chapter 11 Case

While providing numerous advantages to the companies that choose to invoke it, Chapter 11 also imposes significant and sometimes burdensome public reporting obligations on them – hence the metaphor of the opened kimono. Because of the debtor’s reporting obligations, creditors and other parties with an interest in the Chapter 11 case (such as potential purchasers […]


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