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Creditors Rights
When are Goods ‘Received by the Debtor’ for Purposes of a Section 503(b)(9) Administrative Expense Claim?
Two Decisions that Clarify “Receipt” of Goods in Administrative Expense Claims Section 503(b)(9) of the Bankruptcy Code1 allows a creditor an administrative expense claim (i.e., a claim with payment priority over other pre-bankruptcy claims) for the value of goods that the debtor “received” within 20 days before filing for bankruptcy. But what precisely does […]
Limiting Credit Bidding in Section 363 Bankruptcy Sales Post-In Re Aéropostale, Inc.
Chilled Credit Bidding and the Section 363 Sale Section 363(k) of the Bankruptcy Code (the “Code”) allows a secured creditor to bid at a section 363 sale and use the amount of their claim to offset the purchase price at the sale, called “credit bidding.” A court may limit this right “for cause.” The “for […]
When Your Tenant Files for Bankruptcy
What a Commercial Landlord Needs to Know When a commercial real estate tenant files a Chapter 11 bankruptcy case, the landlord is faced with unfamiliar issues. Although each case is unique due to its own facts and the rulings of the bankruptcy court, this article will provide a basic overview of issues facing a commercial […]
90 Second Lesson: What is a “UCC Article 9” Sale?
QUESTION: Jack B. emailed, asking, “Please explain what an Article 9 sale is. My lawyer said that if I give a security interest to a lender, it can do an Article 9 sale. What is an Article 9 sale?” ANSWER: Well, Jack, Article 9 of the Uniform Commercial Code governs the relationship between a […]
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 […]
Unsecured Creditors Prevail Against the UCC-1
In the realm of lending, the perfected Uniform Commercial Code-1 (“UCC-1”) is the hallmark of security. If a secured asset has value, and the liens are valid, what other issues are there to consider? Well, in at least one instance, underlying intercompany notes were the issue. And because of the nature of these notes, the […]
What Else Can a Creditors Committee Do? Maybe Reap $1.5 Billion for Unsecured Creditors (Lender Beware)
JPMorgan Chase & Co. and others (“JPM”) lent $1.5 billion to General Motors Corporation (“Old GM”) under a term loan agreement (the “Term Loan Agreement”). JPM was the senior secured creditor of Old GM. Old Gm went into chapter 11 bankruptcy. Under the terms of the DIP financing approved by the bankruptcy court, proceeds of […]