DailyDAC
Share this...

Business Bankruptcy

Fancy Filing: Can They File a Chapter 11 Case Just to Gain a Litigation Advantage?

Catherine, Jules, and Jim each founded and owned one-third of the company. The company thrived. The owners fell out, with Catherine on one side and Jules and Jim on the other. Lawsuits fly. Under a provision of the state corporation laws, Jules and Jim voted for the corporation to buy out Catherine. Simple resolution? No, for there were fights over valuation […]


RECOMMENDED READING: PACA Claims in Bankruptcy

Certain suppliers of agricultural goods get paid ahead of secured party, both inside bankruptcy and outside bankruptcy. The suppliers benefit from a federal statutory trust imposed to protect them from nonpayment. The goods involved are “fresh fruit and fresh vegetables of every kind and character” – and regulations set the limits on what qualifies. Suppliers […]


Not Necessarily Free and Clear I: Purchasing Real Estate Property in a Section 363 Sale

Lou is considering purchasing commercial real property from a company in bankruptcy. Lou is skeptical that, as he has heard, a section 363(b) sale “cleans” the assets of all liens, claims, and encumbrances. Lou’s skepticism is well-founded. The Golf Course Case. Golf course land was sold via a section 363 sale, and the sale was […]


KUNEY’S CORNER – Cramming Down a Chapter 11 Plan by Giving Secured Creditor Substitute Collateral

Can a chapter 11 debtor confirm a plan that gives a hostile secured creditor a lien on an orange as a substitute, in essence, for the secured creditor’s lien on an apple that the debtor wants to keep and use?[i] Yes, if the value of the new lien meets the test of “indubitable equivalence” with […]


Bid Now or Forever Hold Your Peace: Challenging the Results of a Section 363 Sale in Bankruptcy (In re New Energy Corp.)

You would like to purchase wind turbines in a lease-to-own scenario, that is, you would like to take possession of certain items and pay for the purchase or ownership over time or in a lump-sum at some point in the future.  You prefer this mode to an outright cash purchase because of your other cash […]


90 Second Lesson: Can the borrower file for bankruptcy just to keep me from foreclosing on a building?

Editors’ Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to info@dailydac.com and we will try to answer it.


Meridian Sunrise Village: Highlighting Some Loan-to-Own Risks

You are a PE Fund manager. Your Fund employs loan-to-own strategies to effect take-overs of target companies. You are accustomed to exerting powerful leverage in chapter 11 cases, particularly when you buy enough claims to confirm a plan, or else to block confirmation of a plan by other parties. For a plan to be approved […]


90 Second Lesson: I’ve been asked to sign an involuntary bankruptcy petition. Should I?

Editors’ Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to info@dailydac.com and we will try to answer it.


KUNEY’S CORNER – Cramdown: An Impaired Class of Claims Says “No” But the Plan is Confirmed Anyway

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 creditors who are not getting paid in full […]


Chapter 11 Debtor’s Reporting Obligations

A central principal of bankruptcy is that a debtor should have the benefit of a “fresh start.”  However, to accord such relief, the Bankruptcy Code, Bankruptcy Rules, and case law require transparency from the debtor and other parties in interest.  As such, strict compliance with reporting requirements is a primary responsibility of a debtor in […]


>