Mark Salzberg

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Bankruptcy Court Applies First-of-Its-Kind Valuation Method to Estimate Cryptocurrency Claims (US)

The bankruptcy court presiding over the FTX Trading bankruptcy last month issued a memorandum opinion addressing valuation of cryptocurrency-based claims and how to “calculate a reasonable discount to be applied to the Petition Date market price” for certain cryptocurrency tokens.  As noted in Bankruptcy Judge John Dorsey’s opinion, “[n]o bankruptcy court has ever estimated the … Continue Reading

(US) Who Owns the Crypto: Bankruptcy Court Rules That Customers Do Not Own The Deposited Crypto

Who owns cryptocurrency held by a cryptocurrency exchange?  Do the cryptocurrency assets belong to the customers who deposited the crypto with the exchange, or do the cryptocurrency assets belong to the exchange itself?  The answer to this question will have huge significance, both in terms of creditor recoveries as well as preferential transfer liability exposure. … Continue Reading

Cryptocurrency Brings Disruption to Bankruptcy Courts—What Parties Can Expect and the Open Issues Still To Be Resolved (Part Two)

In this second part of our blog exploring the various issues courts need to address in applying the Bankruptcy Code to cryptocurrency, we expand upon our roadmap.  In part one, we addressed whether cryptocurrency constitutes property of the estate, the impacts of cryptocurrency’s fluctuating valuation, issues of perfection, and the effects of cryptocurrency on debtor-in-possession … Continue Reading

Cryptocurrency Brings Disruption to Bankruptcy Courts—What Parties Can Expect and the Open Issues Still To Be Resolved (Part One)

Many authorities and commentators have considered cryptocurrencies, and the blockchains that undergird them, as a potentially disruptive force in the financial industry.  Now, that disruption has made its way to a different side of finance—bankruptcy, and during the past year, the United States bankruptcy courts have had to confront many unexpected challenges involved in dealing … Continue Reading

How Close Can You Be To Cannabis And Still Have Access To The Bankruptcy Courts? (US)

How close is too close?  The answer to this question can have dire implications for people and companies involved in the cannabis industry who wish to seek bankruptcy protection.  Last month, a United States District Court issued an opinion which, while it did not directly answer this question, rejected a “zero tolerance” cannabis policy and … Continue Reading

Bankruptcy Court Doors Swing Open For Cannabis Companies, But Just Slightly

Are bankruptcy doors now opening for cannabis companies?  A decision last week from a California bankruptcy court indicates perhaps so, at least for cannabis companies that are no longer operating. Factual Background The Hacienda Company, LLC (the “Debtor”) was in the business of wholesale manufacturing and packaging cannabis products.  After it ceased operations in February … Continue Reading

Highland Capital Asks Supreme Court to Review Fifth Circuit Exculpation Excision Ruling

Last November we wrote about the Fifth Circuit Court of Appeals’ decision in Highland Capital Management, L.P., where the court reversed the bankruptcy court’s approval of a plan’s exculpation clause for non-debtors and limited the universe of parties covered by that provision. Relying on Bank of New York Trust Co., NA v. Official Unsecured Creditors’ … Continue Reading

Who Owns the Crypto, the Customer or the Debtor?

Whose crytpo is it?  With the multiple cryptocurrency companies that have recently filed for bankruptcy (FTX, Voyager Digital, BlockFi), and more likely on the way, that simple sounding question is taking on huge significance.  Last week, the Bankruptcy Court for the Southern District of New York (Chief Judge Martin Glenn) attempted to answer that question … Continue Reading

Equitable Mootness No Bar to “Slicing & Dicing” Exculpation Clause From Confirmation Order

While the Judge-made doctrine of equitable mootness continues to beguile and often stymie parties-in-interest seeking to appeal an order confirming a chapter 11 plan (as well as other orders which are on appeal prior to confirmation of a plan), appellants in the Fifth Circuit can continue to rest assured that the doctrine will be applied … Continue Reading

Cannabis and Bankruptcy: 2020 in Review

In 2020, bankruptcy court doors continued to be shut to cannabis companies.  Perhaps most troubling is the continued bar for companies that are only tangentially involved in the state-legalized cannabis industry.  Although outlier cases exist, and even though courts have hinted that bankruptcy may be appropriate for some cannabis-related individuals and companies in some situations, … Continue Reading

New York Appellate Court Holds Bankruptcy Exception to Insured vs. Insured Exclusion Restores Directors and Officers Insurance Coverage

Our insurance colleagues recently discussed a bankruptcy-related insurance case in the Squire Patton Boggs Insurance & Reinsurance Disputes Blog.  The post analyzes the bankruptcy exception to the insured vs. insured exclusion found in most directors & officers liability insurance policies.  That exclusion precludes insurance coverage when one insured (e.g., the debtor) sues another insured (e.g., … Continue Reading

Can Chapter 11 Debtors Receive PPP Loans?

The nearly $350 billion loan program made available to small businesses by the Coronavirus Aid, Relief, and Economic Security (CARES) Act was tapped out in less than two weeks. In response to this overwhelming demand, on Friday, April 24, 2020, an additional $320 billion was funded into the loan program, and the second round of … Continue Reading

Webinar Recording: Tools to Navigate the Financial Crisis Related to COVID-19

Today, April 6, the American Bankruptcy Institute (ABI) hosted a free webinar featuring a distinguished panel of Squire Patton Boggs and FTI Consulting professionals, including former House Speaker John A. Boehner. More than 600 attendees tuned in to hear these experts decipher the most recent federal stabilization programs and developments and provide unique and practical … Continue Reading

Tools to Navigate the Financial Crisis Related to COVID-19 Webinar

Please join the American Bankruptcy Institute’s (ABI) free webinar featuring a distinguished panel of Squire Patton Boggs and FTI Consulting professionals, including former House Speaker John A. Boehner, this Monday, April 6, from 12:00 – 1:15 pm EDT. These experts will decipher the most recent federal stabilization programs and developments and provide unique and practical … Continue Reading

Licensees And Licensors Need To Prepare For Potential Bankruptcies Caused By COVID-19

We are in unprecedented times. The current COVID-19 pandemic will not only have an impact on the physical health of our country, but the economic health of our country as well. Increased bankruptcy filings are a virtually certainty and this raises concerns of many, including licensors and licensees of intellectual property. What should these parties … Continue Reading

New Year, New Resolutions and New Name

Happy New year to all of our blog readers! With the start of a new decade, we are giving our restructuring and insolvency blog a fresh new look and name: Restructuring GlobalView. Restructuring GlobalView will provide readers with unique perspectives on restructuring and insolvency issues from around the globe, offering practical views from the global … Continue Reading

Cannabis and Bankruptcy: 2019 in Review

Courts struggled this year to find a balance between state-licensed cannabis activity and the federal right to seek bankruptcy protection under the Bankruptcy Code.  During 2019, we had the first circuit-level opinion in the bankruptcy/cannabis space that appeared to open the door to bankruptcy courts, albeit slightly.  We also had lower court opinions slamming that … Continue Reading

Up in Smoke: More Cannabis Companies Get Shut Out of Bankruptcy

In another loss for the cannabis industry, a district court recently affirmed the dismissal of chapter 11 petitions filed by companies that sold product used by both state-licensed marijuana growers and non-marijuana growers.  The district court’s decision in Way to Grow, Inc. demonstrates that the door that was opened by the Ninth Circuit in Garvin … Continue Reading

Bankruptcy Court Tells Debtors They Must Choose Between Bankruptcy Or Being Able To Buy Medical Marijuana

We have written before about the virtual dead end faced by marijuana companies who try to seek protection in the bankruptcy courts.  Almost uniformly, bankruptcy courts have shut their doors on marijuana companies, including their landlords and suppliers.  These courts have held that although marijuana use may be legal in a majority of the States, … Continue Reading

Dubai Makes Moves Toward International Best Practices with New Insolvency Law

On May 30, 2019, Dubai’s ruler, Sheikh Mohammed bin Rashid al-Maktoum, signed DIFC Insolvency Law, Law No. 1 of 2019 (the “New Insolvency Law”) into law, thereby repealing and replacing DIFC Law No. 3 of 2009.  The New Insolvency Law, and supporting regulations (the “Regulations”), became effective on June 13, 2019, and govern companies operating in … Continue Reading
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