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Bankruptcy Litigation

90 Second Lesson: Secured Creditors and Toll Charges

  QUESTION: An investment banker recently wrote in, saying this:  “I am currently helping a troubled company sell itself.  The proposed buyer wants to buy its assets through a 363 sale in Chapter 11 and is offering to pay the full amount the bank is owed on its secured debt. The bank is pushing back, trying […]


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 […]


Commerical Bankruptcy Litigation

The 2019 edition of Commercial Bankruptcy Litigation was just released by West Publishing Company. This 2,000+ page treatise, with contributions from dozens of top firms across the US, is designed with the non-bankruptcy attorney intended to be its primary reader. The treatise is divided into three sections: (a) “Fundamentals,”, with chapters covering the basics of […]


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 […]


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 […]


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