Business Bankruptcy
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 […]
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 […]
How Much Can I Add to My Claim? (says Lender) How Much Liquidity Will I Have? (says Reorganizing Debtor): On the Payment of Post-Petition Interest
Your company owes substantial loan principal secured by real property that your company is developing into a hotel, condominiums, and a nightclub. Your company defaulted on the construction loan by missing some payments and filed a chapter 11 petition with the strategic goals of making operations more efficient and further developing the real property to […]
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 […]