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Bankruptcy Litigation

Third-Party Litigation Funding and Issues It Creates In Bankruptcy Cases – This Ain’t Your Father’s Contingency Fee Arrangement!

Third party litigation funding (“TPLF”) is, beyond a doubt, here to stay. In bankruptcy cases, TPLF arises in a number of contexts. First is the TPLF as a pre-petition secured or unsecured creditor—i.e. the TPLF source funded litigation and thereby acquired property rights in litigation proceeds or perhaps otherwise as a result. Second, in a […]


Fourth Circuit Approves Recharacterization of Secured Debt Into Equity

A Brief Summary of PEM Entities​: Unsecured Creditors Pulled Down a Secured Creditor In its recent unpublished opinion PEM Entities, LLC v. Province Grande Old Liberty, LLC, 2016 WL 4254917, (4th Cir. Aug. 12, 2016), the Fourth Circuit Court of Appeals affirmed the bankruptcy court’s award of summary judgment to certain unsecured creditors (the “Plaintiffs”) […]


Limiting Credit Bidding “For Cause” After In re Aeropostale

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.”[2]   A court may limit this right “for cause.”[3]  The “for cause” standard is not defined in the Code […]


Litigation Funder Monetizes Portion of Fraudulent Transfer Judgment in Cutting-Edge Transaction

Gerchen Keller purchases a portion of the interest in proceeds of $213 million fraudulent conveyance judgment in innovative public sale. An interesting transaction took place on September 8, 2016. The chapter 7 bankruptcy trustee for Magnesium Corporation of America (“MagCorp”) sold a $50 million share of a $213 million judgment it has against fraudulent conveyance […]


Fraud And Deceit in Bankruptcy Cases — Lessons from “The Clouds”

Some of the best advice on how to deal with a looming bankruptcy was written around 2,500 years ago. Yes, all the way back in 423 B.C., the Greek playwright Aristophanes offered his thoughts for posterity in his comic play The Clouds, whch tells the story of Strepsiades, a man unable to even sleep because […]


Federal Judge Penalizes For Offensive Remark Towards A Female Attorney

If you’re thinking that the inflammatory words of a certain candidate in the current race to the White House may be helping to re-legitimize the condescending treatment of women through such sexist talk as referring to their monthly cycles—or imminent lack thereof—don’t expect the world of federal court judges to follow along. Indeed, while the […]


90 Second Lesson: Is Bankruptcy Needed if Creditors Will Just Agree to Take Less?

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.


90 Second Lesson: What will your lender do if you default on a commercial loan?

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.


Golf is a Crazy Game: Stanford International Ponzi Scheme

On March 11, 2015, the Fifth Circuit Court of Appeals, in Ralph Janvey, as Receiver for Stanford International Bank Limited, et al., v. The Golf Channel Incorporated, Case No. 13-11305, issued a stomach curdling decision requiring The Golf Channel (“Golf Channel”) to return nearly $6 million to the Receiver for Stanford International Bank, Limited (“Stanford”), […]


Not Necessarily Free and Clear III: Imposing Debtor’s Unemployment Insurance Ratings Onto Purchaser?

On April 30, 2009, Chrysler and 25 of its direct and indirect subsidiaries (collectively, “Old Chrysler”) commenced bankruptcy cases that became jointly administered.[i] Scarcely a month later, Old Chrysler sold its assets through a sale under section 363 of the Bankruptcy Code to a newly-formed entity that went on to do business as Chrysler (“New […]


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