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Executory Contracts and Unexpired Leases
The Nuts & Bolts of Ipso Facto Clauses and Golden Share Arrangements That May Sidestep the Bankruptcy Code’s Prohibition
When are Ipso Facto Clauses and Golden Share Arrangements Enforceable in Bankruptcy? “Termination on bankruptcy” provisions—ipso facto clauses—are commonly used in many types of business contracts, providing for the termination of the contract (either automatic or at the non-debtor party’s election) upon the obligor’s filing of bankruptcy or the occurrence of similar events or conditions. […]
How to Protect Your IP Rights When Your Licensor Files for Bankruptcy
What Companies Can Do to Protect Their IP Rights in Bankruptcy The Kodak case brought into sharp focus the treatment of intellectual property rights in bankruptcy. Inventor of the roll-film hand camera in 1888 and maker of the first digital camera, the iconic company licensed thousands of patents in its extensive patent portfolio, estimated at […]
Solvent Debtor? A Chapter 11 Debtor Need Not Be Broke
A Solvent Debtor Can File for Bankruptcy…but Can They Survive a Motion for Dismissal? Suppose that your borrower or customer files for chapter 11 bankruptcy. You do not like this, because you’ll almost certainly not collect the full amount owed to you. In fact, to get anything at all, you’ll have to get involved with […]
What is Venue, and When Is Venue Transfer Permissible in Bankruptcy Litigation?
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 […]
Dealing with Corporate Distress 06: Four Basic Chapter 11 Concepts to Know Before We Go any Further
The ABCs of ABCs, Business Bankruptcy, & Corporate Restructuring/Insolvency In the last two installments of this series, we introduced you to things a company should consider before deciding whether to file chapter 11, and a timeline for understanding how a “typical” chapter 11 case proceeds. In this quick little ditty, we want to make sure […]
How to Assess 3 Potential Preference Action Defenses
Businesses Have Options for Defending a Preference Action. Here’s How to Build the Right Defense. Your company has just been served with a preference complaint. The complaint seeks to recover tens or hundreds of thousands of dollars even though your company has already taken a loss on the debtor’s accounts. Your initial response is anger […]
What Distressed Businesses and Their Counsel Should Know About the Consolidated Appropriations Act 2021 and Its Effect on the Bankruptcy Code
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 […]
The Importance of Liquidity in the Capital Structure of a Distressed Company
How Liquidity Becomes the Kryptonite of a Distressed Company’s Capital Structure A company’s “capital structure” is the array of its liabilities and equity. It is often described by the debt to equity ratio, which is the amount of total debt divided by total equity. Capital structure commonly consists of three main components: working capital (also […]
Analyzing Executory Contracts: Can AI Save Us from The Contract Tsunami?
The Overlooked (Giant) Asset Class: Executory Contracts In today’s world, one of the most important sources of assets and liabilities for a debtor is its executory contracts. Companies that were once heavy with assets and employees now have a much lighter balance sheet accompanied by many more business agreements enabling (or causing) them to utilize […]
Potential Pitfalls and Opportunities in Healthcare Restructuring
How Unique Issues in Healthcare Restructuring Set It Apart from Corporate Restructuring Over the past decade, arguably no industry experienced such dramatic regulatory change or consistent legislative uncertainty as healthcare. Today, continued efforts to repeal, defund, replace, or amend the Affordable Care Act—coupled with rising pharmaceutical costs, increased competition, massive capital investment expenses, etc.—virtually […]