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Creditors Rights

What do Secured Lenders Want? The Basics of Loan Forbearance Agreements

When a borrower defaults on its loan agreements,[i] a lender may, among other options, sue to foreclose on its collateral and collect from the borrower. The lender, however, may instead agree to amend the loan documents or enter into a loan forbearance agreement. If the borrower can convince the lender that, within a reasonably short […]


When Your IP Licensor Files for Bankruptcy

How to Protect Your IP License Rights In 1888 – yes 1888 – Kodak coined the slogan: “You press the button, we do the rest.” The company, which was immortalized in Paul Simon’s song “Kodachrome1”, sold its assets – at apparent fire-sale prices – in bankruptcy court in New York. The Kodak case brought into […]


When Your Borrower Files for Bankruptcy (DIP Financing, Cash Collateral, and Adequate Protection)

What you need to know as a secured lender to a borrower who goes into bankruptcy you should know already, well in advance. If your borrower’s bankruptcy filing has taken you by surprise, please refer to my next article in this series, in which I will discuss the tactics and strategies in the contested case […]


Opportunities in Bankruptcy: Turning Coal Into Diamonds

“The time to buy is when there’s blood in the streets.” – Baron Rothschild Don’t Panic, There Are Many Opportunities in Bankruptcy When a client or a competitor files for bankruptcy, it is natural to reflect on the downside. What’s going to happen to my outstanding receivable? Is the market primed for a downturn? How […]


Absolute Priority Rule in Bankruptcy: Are You Atop the List?

If you are a vendor, service provider or another unsecured creditor to a chapter 11 debtor, you cannot be blamed for feeling like a duped lover after learning about the bankruptcy of your once devoted business companion. Despite the promises that “I’ll stand by you if you stand by me,” all those outstanding invoices won’t […]


Lender Liability Is Alive and Well: A Case Study

The relationship between a lender and borrower can be complex. The borrower wants capital to run and grow its business and the lenders want to earn a return and eventually get its principal back. If the borrower complies with the terms of the loan, all is good. If the borrower breaches then the lender has […]


Timing Is Everything: How to Make a Rough Assessment of Potential Preference Action Defenses (PART 2)

Editor’s Note: Part 1 of this article laid out the prima facie case a plaintiff needs to have in order to sue for a preference, outlined the major defenses and explained the importance and use of certain key documents in assessing and maintaining a defense. Part 2 now delves into the major defenses in greater […]


Timing Is Everything: How to Make a Rough Assessment of Potential Preference Action Defenses (PART 1)

Your company has just been served with a preference complaint. The complaint seeks to recover tens or hundreds of thousands of dollars even though your company already has taken a loss on the debtor’s accounts. Your initial response is anger at the unfairness of being sued. Fortunately, Congress included defenses to preference actions so that […]


To Tell The Truth; The Importance Of Full And Frank Disclosure To Preserving The Attorney-Client Privilege

Imagine yourself as the owner of a small company, or the CEO of a large corporation. The company is not doing well, but you are convinced the distress can be overcome. While sales are down, competition is fierce and your latest expansion – made with borrowed money – did not go well, the business is […]


Being Proactive: Steps a Supplier Can Take in the Face of Potential Customer Bankruptcy

The impending bankruptcy of a retailer is one of the most stressful experiences that a supplier may face. The supplier is confronted not only with the potential loss of a major customer, but also with the possibility of significant financial losses on account of unpaid accounts receivable. A supplier often finds itself scrambling to mitigate […]


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