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Chapter 11 Plans

When a Seller of Real Property Files for Bankruptcy Before Closing

What are the purchaser’s rights under an executory contract? Sven, of St. Paul, related to us this sad but musical tale, which pertains to purchasing real estate where the seller goes bankrupt before closing: You see, she and I entered into a written contract to buy a piece of land with a small house on […]


Dealing with Distress for Fun & Profit–Installment #20—A Primer on Plan Support Agreements & Restructuring Support Agreements

A written tour of business bankruptcy and its alternatives. This is the latest in the series, Dealing with Distress for Fun & Profit, which you can read from the beginning if you like. Our last two installments focused on the basics of confirming a plan, followed by specific plan confirmation issues to address with individual […]


Fancy Filing: Can They File a Chapter 11 Bankruptcy Case Just to Gain a Litigation Advantage?

The Answer Is: It Depends Debtors often use bankruptcy filing to gain an advantage in litigation. Whether or not they succeed depends on the facts and circumstances of the bankruptcy case. Let’s look at a sample case to determine how a court might rule. Case Study Catherine, Jules, and Jim each founded and owned one-third […]


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 […]


Chapter 11 Debtor’s Reporting Obligations

Reporting Requirements Make the Debtor More Transparent One of the  central principles of bankruptcy is that a debtor should have the benefit of a “fresh start.” However, to accord such relief, the Bankruptcy Code, Bankruptcy Rules, and case law require transparency from the debtor and other parties in interest. As such, strict compliance with reporting […]


Not Necessarily Free and Clear I: Purchasing Real Estate Property in a Section 363 Sale

Just Because A 363 Sale Says Free and Clear, Does Not Mean It Is Free and Clear A bankruptcy debtor is offering commercial property in a section 363 sale. It is an attractive property and Lou is considering purchasing it. Lou has heard that a section 363(b) sale “cleans” the assets of all liens, claims, […]


When Your Customer Files for Bankruptcy

You Still Have Options In the Event of a Customer Bankruptcy When a customer files for bankruptcy, vendors with debts owed by the customer/debtor that arose before the commencement of the case (the “Petition Date”) can be exposed to considerable losses. Once the case is filed, the vendor becomes a creditor with a claim against […]


A Chapter 11 Debtor Need Not Be Broke

A Solvent Debtor Is Not an Oxymoron Suppose that your borrower or customer files a chapter 11 case.[i] You do not like this because you’ll almost certainly not collect the full amount owed to you and to get anything you’ll have to get involved with a bankruptcy case and hire attorneys. Your discontent becomes fury […]


90 Second Lesson: To Stalk or Not to Stalk? Why be a Stalking Horse Bidder?

QUESTION: Jamie S. emailed recently, asking “Can you please sum up the pros and cons of serving as the “stalking horse” in a bankruptcy sale? ANSWER: Yes, Jamie, we can. A stalking horse bidder plays an important role in many bankruptcy acquisitions, and one of the most important decisions confronting a purchaser in a bankruptcy acquisition […]


Dealing With Distress For Fun & Profit Installment 19 – Chapter 11 Plan Acceptance, Getting a Class to Accept a Plan

A written tour of business bankruptcy and its alternatives. This is the latest in the series, Dealing with Distress for Fun & Profit, which you can read from the beginning if you like1. Our last installment focused on the basics of confirming a plan. In this installment, our fearless authors drill down into the various […]


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