Dealing with Corporate Distress 12: Meet Our Little Friend, The UCC
The ABCs of ABCs, Business Bankruptcy, & Corporate Restructuring/Insolvency Understanding corporate distress requires more than just knowledge of the Bankruptcy Code, as we discuss in Installment 7 of this series. Taking a step back and understanding other areas of business[...]
Commercial Real Estate Tenant Bankruptcy — What To Do
What a Commercial Landlord Must Know When a commercial real estate tenant files a chapter 11 bankruptcy, the landlord is faced with unfamiliar issues. Although each case is unique due to its own facts and the rulings of the bankruptcy[...]
The Road to an Assignment for the Benefit of Creditors (ABC): A Case Study
How Does a Company Decide to Enter an Assignment for the Benefit of Creditors? This is how a troubled company considered its duties and options before executing a strategy using an assignment for the benefit of creditors (ABC). They successfully[...]
Assess 3 Potential Preference Action Defenses
Defend Against Preference Action — Build the Right Defense 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 has already taken a loss[...]
Dealing with Corporate Distress 11: How to Protect Your Claim In & Out of Bankruptcy
Some General Best Practices In Installments 9 and 10 of this series, we discuss the differences between types of creditor claims and their respective priorities. In this Installment, we discuss some steps creditors can take to minimize the risk of[...]
The “A&P” Chapter 22 Bankruptcy Saga: A Canary in the Coal Mine
The Surprising “Chapter 22” A&P Bankruptcy Case On July 20th, 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[...]
Dealing With Defaults Under Article 9 of UCC: A Player’s Guide for the 21st Century
Dealing With Defaults Under Article 9 of UCC: A Player's Guide for the 21st Century, by Etahn Cohen and Jonathan P. Friedland, begins with a summary of the legal remedies available under Article 9 of the UCC to a lender[...]
Ponzi Scheme Lender May Be Off The Hook, After All: A Case Study
Fair Finance Company v. Textron Financial Corporation: The Rundown In 2016, the U.S. Court of Appeals for the Sixth Circuit revived a trustee’s $17.5 million avoidance and claw-back suit against a lender, finding that Textron’s security interests in Fair Finance[...]
An Introduction to Bankruptcy Claims Trading
A Primer on the Bankruptcy Claims Marketplace Upon the filing of a bankruptcy petition by a debtor in a U.S. chapter 11 proceeding, any attempts to collect debt by a creditor are halted. As a result, creditors face the daunting[...]
Dealing with Corporate Distress 10: All About “Claims” Outside Bankruptcy
The ABCs of ABCs, Business Bankruptcy, & Corporate Restructuring/Insolvency In Installment 9 (which you should read again before you read this installment), we discuss what a claim is, and the concept of claim priority and priority in the context of[...]
90 Second Lesson: How a Licensee is Treated in the Bankruptcy of its Licensor
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 reader named Harvey M. wrote in to[...]
Assignee Unknown: The Curious Cases of SmartLabs, Shine Bathroom Technologies, Liftopia, GlassPoint, SolarReserve, Maker Media, & Toymail
[Editors' Note: The easy-to-read pdf version of this article is available for download here.] What is an Assignment for the Benefit of Creditors? An assignment for the benefit of creditors is a legal procedure available in many, but not all,[...]
You Sued and Won. Now What? How to Enforce a Judgment in Illinois and Turn It Into Cash
You’re elated. You just won a hard-fought trial and obtained a money judgment against a corporate defendant. You believe the defendant/judgment debtor has the means to satisfy the judgment, but it refuses to pay voluntarily and is stonewalling you. It’s[...]
Important Issues and Developments When Filing a Proof of Claim
In some cases, the filing of a proof of claim by a creditor may not be prudent. Before filing a proof of claim, the creditor should carefully consider the potential effects on the creditor. Generally, proofs of claim are not[...]
An “Oldie,” But a Goodie: Recommended Reading On the Subject of ABCs
An Assignment for the Benefit of Creditors (ABC) is a state law alternative to chapter 7 bankruptcy, chapter 11 bankruptcy, receivership, composition, or dissolution. In “Assignments for the Benefit of Creditors: Simple as ABC?” Robert L. Eisenbach III provides a[...]
There Ought to Be a Law, and There Is: When the Insolvent LLC’s Manager Distributes Cash But Does Not Pay Creditors
Let us suppose that a provider of tax resolution services to a large number of customers borrows cash secured by accounts receivable it generates and other personal property (but not by real property). Let us further suppose that the borrower’s[...]
What Constitutes the “Legal Rate” in a Solvent Debtor Bankruptcy Case?
Defining the Legal Rate in a Solvent Debtor Bankruptcy Using Contract Rate and States’ Statutory Rates of Interest Chapter 11 bankruptcies generally find the debtor to be insolvent, but not always. Occasionally, a debtor will emerge from the bankruptcy process[...]
What do Secured Lenders Want? The Basics of Loan Forbearance Agreements
When a borrower defaults on its loan agreements, 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[...]
90 Second Lesson: Early Warning Signs of a Troubled Loan
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 B. James asks, “I own a company that[...]