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Bankruptcy Court Dismisses Cannabis Company Employee’s Chapter 13 Case

Last month, the United States Bankruptcy Court for the District of Massachusetts denied confirmation of a cannabis company employee’s Chapter 13 plan and dismissed his bankruptcy case.  The employee, Scott H. Blumsack (the “Debtor”), is a general manager who is licensed in Massachusetts to work for Society Cannabis Co., a Massachusetts-licensed retailer, wholesaler, and producer … 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

Bankruptcy Court Allows Service of a Subpoena Via Twitter

When a court-appointed trustee or liquidator is tasked with liquidating an entity, they need to gain possession of all of the entity’s assets.  In crypto cases, this task can prove difficult when trying to identify and control all of the entity’s different digital assets and obtain cooperation from the entity’s former operators.  Unfortunately, in the … 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

Cross Border Recognition, 25 years on: the view from each side of the Pond

The recent decision in Re Astora Women’s Health LLC illustrates the importance of cross-border recognition of insolvency processes, highlighting the benefits of a joined-up global approach which recognises that modern business do not stop for international borders. With Astora hot off the presses and the twenty-fifth anniversary of the UNCITRAL Model Law on the horizon … Continue Reading

Claims Agents Beware:  Business Arrangement With Claims-Trading Platform Raises Court’s Concern

Online claims-trading platform Xclaim Inc. came under scrutiny this past summer in the Madison Square Boys & Girls Club Inc. bankruptcy case pending in the United States Bankruptcy Court for the Southern District of New York.  Since at least 2019, Xclaim has executed agreements with at least five notice and claims agent firms to synchronize … 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

Fifth Circuit Says A Solvent Debtor Must Pay According To The Contract – No Doubt About It

The saga of the first Ultra Petroleum Corp. chapter 11 cases appears to have finally come to an end.  Numerous articles have been written on the tortured history of whether certain creditors of Ultra Petroleum are entitled to payment of their contractually mandated Make-Whole Amount and default rate of interest.  The creditors’ quest for allowance … Continue Reading

In re PWM Property Management: Creditors’ and Equity Holder’s Attempt to File and Solicit Competing Plan During Exclusivity Period Denied

What options does a creditor have when they are frustrated with how a debtor is conducting its chapter 11 bankruptcy case?  In In re PWM Property Management LLC, the Delaware bankruptcy court denied a motion by creditors and interest holders to file a proposed plan of reorganization as an exhibit to their opposition to the … Continue Reading

Sanctions Against Russia and Restrictions on Flow of Capital Lead to First Chapter 11 Filing in the United States and Will Likely Lead to More Filings

As the conflict in Ukraine enters its second month and the list of sanctions and restrictions imposed by the United States, the European Union and other countries increases to punish Russia, the effects of the sanctions will become more apparent and are expected to have profound and lasting effects on a large number of industries. … Continue Reading

Webinar Recording: The Conflict in Ukraine – Impact on Capitals, Markets and Boardrooms

On Tuesday, March 22, 2022, Squire Patton Boggs and the American Bankruptcy Institute hosted a webinar titled “The Conflict in Ukraine:  Impact on Capitals, Markets and Boardrooms.”  The webinar featured a distinguished panel of Squire Patton Boggs professionals, including former Speaker of the US House of Representatives John Boehner, Career Ambassador Frank Wisner, Ambassador Matthew … Continue Reading

The Bankruptcy Court’s Ruling is in: J&J’S Texas Two-Step Does Not Constitute A Bad Faith Filing

Last week this author delved into what has become known as the “Texas Two-Step,” the arguments for and against its permissibility and the broader implications for the bankruptcy system.  The discussion focused on an ongoing trial on motions filed in the bankruptcy case of LTL Management, LLC (“LTL” or the “Debtor”), a Johnson & Johnson … Continue Reading

The “Texas Two-Step” Firestorm: This Is No Dance!

In recent weeks, a move dubbed the “Texas Two-Step” has leaped from coverage first in publications geared only for the professional restructuring community, then to the mainstream press, then to hearings before the United States Senate Judiciary Committee, and now to a full-blown trial ongoing in a New Jersey bankruptcy court.  For those not closely … Continue Reading

Limetree Bay: Messy Auction Process Generates Increased Recoveries

Can messy be good?  Sometimes the answer is yes.  The chapter 11 case filed by Limetree Bay Services, LLC and five of its affiliates (“Limetree Bay”) is one example of auction disorder actually bringing increased creditor recoveries. Bankruptcy professionals, financially distressed companies and acquirers of distressed assets can learn valuable lessons from this odd bankruptcy … Continue Reading

District Court Rejects Purdue Pharma’s Chapter 11 Plan Over Non-Consensual Releases Provided to Sackler Family

On December 16, 2021, United States District Judge Colleen McMahon of the Southern District of New York overturned the confirmation of Purdue Pharma’s chapter 11 plan of reorganization, “put[ting] to rest” the non-consensual third-party releases debate that has “hovered over bankruptcy law for thirty five years.”  Judge McMahon concluded in her 142-page opinion that “the … Continue Reading

Restructuring Foreign Companies in England Using a Restructuring Plan

A restructuring plan may well be a very effective way of restructuring a foreign company. It has several advantages over a scheme of arrangement and with a relatively low entry threshold, the English court has already sanctioned at least one plan for a foreign company in the relatively short time that it has been available.  … Continue Reading

Congress Proposes Significant Bankruptcy Code Changes to Protect Tort Claimants and Creditors

Two controversial mechanisms are available in many circuits to assist parties in a chapter 11 case to reach a global resolution and obtain plan confirmation:  non-consensual third-party releases and preliminary stays against third-party litigation.  On July 28, 2021, the House Committee on the Judiciary Subcommittee on Antitrust, Commercial and Administrative Law announced proposed legislation, the … Continue Reading
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