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 Robin T. wrote in asking, I own a small retail chain that has been struggling. I hired a lawyer to negotiate with my creditors, and she told me I should speak with my accountant about the possible tax consequences of getting my creditors to forgive some of the company’s debt. The IRS can’t be that cruel, can it? Answer. Indeed […]

A Panel Discussion on the Choice and Challenges of Bankruptcy Venue and Venue Transfers In bankruptcy litigation, the venue can have a major influence on an outcome. We selected expert panel members—each a partner or managing director in the restructuring industry—to discuss why venue fights occur and how business owners (and their advisors) should approach choice of bankruptcy venue, as well as venue transfers. Our expert panelists explore how courts resolve disputes over the venue of a case. Expert Panelists Lisa Vandesteeg, Financial Services and Restructuring Partner at Levenfeld Pearlstein, […]

What is the Consolidated Appropriations Act? Congress passed the Consolidated Appropriations Act, 2021 on December 21, 2020, and President Trump signed the massive act into law six days later, when it became effective. The act includes several changes to title 11 of the United States Code, which is usually called the “Bankruptcy Code,” and most changes sunset on either the first or second anniversary of the effective date of the act. Here are the changes you need to know, in the order they are presented in the act. Property That […]

Lender Liability Law Protects Distressed Borrowers from Unfair Practices The relationship between a lender and borrower can be complex. The borrower wants capital to run and grow its business, and the lenders want to earn a return and eventually get their principal back. If the borrower complies with the terms of the loan, all is good. If the borrower breaches, then the lender has a number of rights and remedies. Sometimes, however, a lender overreaches. One example of an overreach is when a lender exerts control over the daily activities […]

[Editor’s Note: This article was originally published on LinkedIn on September 20, 2020.] There has been a significant uptick in the number of articles appearing in mainstream media (e.g. newspapers) about the wave of bankruptcies that has already started to appear. One article (linked here), authored by Matt Egan for CNN Business and published about a week ago, caught my particular attention. It is well-written but there were a few things about it that were wrong or, at least, not entirely right. And, so here I am with my thoughts… In […]

The Complexity of Student Loan Debt in Bankruptcy… Demystified Student loan debt has hit a record $1.6 trillion. This number is staggering on its own, but as millions of Americans lose their jobs and source of income during the COVID-19 pandemic, student loan borrowers have to look at their options for repayment.  The U.S. government is allowing borrowers to suspend all federal loan principal and interest payments until September 30, 2020, but this still leaves many private loan borrowers at the hands of their lenders. For those experiencing extreme financial […]

A Series on the ABCs of ABCs, Business Bankruptcy & Corporate Restructuring/Insolvency Greetings, Dear Reader: It seems you’re interested in learning how to deal with corporate distress, and we’re glad you’re here. But let’s first make sure you got on the right plane. Maybe you… Are a C-suite executive of a business that’s considering buying a failing competitor on the cheap Manage a private equity or hedge fund Are a junior associate in the restructuring or special situations group of a law, investment banking, or accounting firm Are a credit […]

A written tour of business bankruptcy and its alternatives In order to understand the options a financially distressed business (or its owners, creditors, or potential buyers) has, one has to understand the Bankruptcy Code. The Bankruptcy Code is contained in Title 11 of the U.S. Code and is divided into chapters. Chapters 1, 3 and 5 are “general” chapters, applicable in all cases: Chapter 1 contains definitions, defines who can be a debtor, describes the courts’ powers, and contains some other general rules. Chapter 3 governs “case administration,” which sounds […]

A written tour of business bankruptcy and its alternatives You manage a private equity or hedge fund. Or maybe you work for a family office. Or maybe you’re the CEO or CFO of a business that has a competitor that is failing and you are considering trying to buy it on the cheap. Or perhaps you are the general counsel of a company that does business with a company that just filed for bankruptcy or that is being sued for a preference. Or maybe you are a business owner considering […]