Defining the Legal Rate in a Solvent Debtor Bankruptcy Using Contract Rate and States’ Statutory Rates of Interest Chapter 11 bankruptcies generally find the debtor insolvent, but not always. Occasionally, a debtor will emerge from the bankruptcy process as a solvent entity. In those situations, Bankruptcy Code §726(a)(5) may entitle creditors of the debtor’s estate to post-petition interest at the legal rate from the date of filing the petition. [i] In other words, the Bankruptcy Code affords creditors an opportunity to recoup the time-value for the lost use of the […]

Lender-on-lender violence has been noted more in recent news, and have been increasingly used in out-of-court restructurings in recent years including during the COVID-19 pandemic.

Explore whether a debtor can file chapter 11 reorganization bankruptcy to evade a court-ordered receivership.

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 you understand four concepts that permeate every chapter 11 case except, perhaps, a prepack. 1. The Automatic Stay When a bankruptcy case is filed, an “automatic stay,” is triggered under Bankruptcy Code § 362. The automatic […]

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.

A written tour of business bankruptcy and its alternatives Companies in chapter 11 typically consider (or at least should consider) other options before ending up there. In fact, distressed businesses tend to follow a fairly predictable pattern, or lifecycle: denial, anger, bargaining, depression, and acceptance- – – No, those are the five stages of grief. In all seriousness, understanding how to cope with, counsel, or live through a distressed businesses situation is easier if you understand the typical lifecycle. You can think about the lifecycle of a chapter 11 debtor […]