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Cash Collateral & DIP Financing
Assignee Unknown: The Curious Cases of SmartLabs, Shine Bathroom Technologies, Liftopia, GlassPoint, SolarReserve, Maker Media, & Toymail
A curious mystery unraveled. Learn about the significant aspects of an Assignment for the Benefit of creditors, and why knowing the Assignee is important.
Legacies of the Jevic Case: Structured Dismissals Five Years after the Fall
The Jevic case upheld the absolute priority rule, but it did not prohibit structured dismissals. How are structured dismissals affected post-Jevic?
90 Second Lessons: Virgin Lender, Virgin Land: When the Collateral is Dirt
Editor’s 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 Tom S. wrote in asking, I am a hard money lender and have loaned on all sorts of collateral, but I’ve never loaned on raw […]
What Secured Lenders Should Know If Their Borrower Files for Bankruptcy
When a Borrower Files for Bankruptcy, How Can Secured Lenders Protect Their Position? As a secured lender, you should know well in advance the necessary details if a borrower files bankruptcy. Let us presume therefore that, from consultations with your borrower, it is clear that the borrower is in distress: The borrower is likely unable […]
Dealing with Corporate Distress 08: Preventing Forest Fires with First Day Motions in Chapter 11
The ABCs of ABCs, Business Bankruptcy & Corporate Restructuring/Insolvency In this installment, we take you on a tour of the time leading up to the filing of a chapter 11 case and the days that immediately follow. Mostly, we’re referring to first day motions. Before we dive into first day motions, however, you should understand […]
How a Distressed Company Can Manage Cash and Stakeholders in a Liquidity Crisis
Considerations for Companies in a Cash Crisis A liquidity crisis is a severe financial situation in which a company does not have enough cash or cash-convertible assets, which can lead to defaults and bankruptcy. Managing cash is critical when working to preserve or maintain solvency in order to maximize opportunities for a successful turnaround or […]
Third-Party Litigation Funding (TPLF) and Issues It Creates In Bankruptcy
Investing in Litigation – The Bankruptcy Code and Third-Party Funding 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 […]
Incorporation by Reference in UCC-1 Filings
How Brevity in Financing Statements Can Lead to Insufficient Collateral Descriptions Our fast-paced society, coupled with the tendency for people to use shorthand in communications by emails and Twitter, influences everyone to look for ways to save time and be less verbose. When preparing and filing a UCC-1, however, brevity can be the filer’s enemy. […]
Kuney’s Corner – Giving Secured Creditor Substitute Collateral in a Chapter 11 Cramdown
Pacifying a Hostile Lender with a Motion to Substitute Collateral Can a Chapter 11 debtor confirm a plan that gives a hostile secured creditor a lien on an orange as a substitute, in essence, for the secured creditor’s lien on an apple that the debtor wants to keep and use?1 Yes, a motion to substitute […]
Dealing With Distress for Fun & Profit – Installment #17 – Overview of DIP Financing and Cash Collateral Motions
There is a seeming irony here in that a company that files for bankruptcy often does not have the cash to do so. That’s where DIP financing comes in.