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
We have written many times over the past few years about how the bankruptcy courts are off-limits to state-legalized cannabis businesses. This past year brought no new relief to the cannabis industry, and the doors to the bankruptcy courts remain shut. Are the other federal courts off-limits as well? A recent district court decision from … Continue Reading
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
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
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
Here we go again – proposed bankruptcy venue legislation is back after previous “reform” efforts came up empty. For those seeking legislative action, what are the chances for venue reform now? Venue for bankruptcy cases is governed by 28 U.S.C § 1408, which provides that corporations may file in the district (a) in which their … Continue Reading
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
Is there any downside to a debtor filing a motion to estimate a claim? Or, is an estimation motion simply procedural in nature? As the debtors recently discovered in In re SC SJ Holdings LLC, a motion to estimate a claim before a bankruptcy court may not always lead to a significantly reduced claim, and … Continue Reading
Section 1930(a)(6) of Title 28 requires the payment of quarterly fees to the United States Trustee (the “UST”) for each quarter that a bankruptcy case is open. The amount of fees is calculated based on the amount of disbursements made by the debtor during each quarter. But, are these fees payable when a trust, established … Continue Reading
Even prior to the COVID-19 pandemic, most retail bankruptcy cases involved at least some effort to maximize value by selling real estate holdings. The Bon Ton Stores, Forever 21, Sears, and Toys ‘R’ Us cases, among others, are perfect examples. These cases have, for the most part, achieved such sales under section 363(f) of the … Continue Reading
On April 19, 2021, the United States Bankruptcy Court for the Eastern District of Virginia granted a motion (the “Seal Motion”) filed by the Intelsat S.A. debtors (the “Debtors”) to seal the hearing on the Debtors’ motion to extend exclusivity and motion to compel plan mediation. Although bankruptcy courts routinely grant motions to seal content … Continue Reading
Although debtors who file for Chapter 11 bankruptcy generally cannot pay prepetition debts until a plan which complies with the “absolute priority rule” is confirmed, there are a number of now well-established exceptions to this rule. As noted (although not actually ruled upon) by the United States Supreme Court in its controversial “Jevic” decision, “[c]ourts, … Continue Reading
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
On January 14, 2021, the Supreme Court unanimously held in City of Chicago v. Fulton that a creditor’s passive retention of a debtor’s property does not violate section 362(a)(3) of the Bankruptcy Code. The Court’s 8-0 decision (Justice Barrett did not participate in the consideration or decision of the case) may have the unintended effect … Continue Reading
On Friday, October 16, 2020 we hosted a webinar along with the American Bankruptcy Institute, that featured a distinguished panel of professionals, including former Speaker of the US House of Representatives John Boehner, former Congressman and Chairman of the Democratic Caucus Joseph Crowley, former Congressman Bill Shuster, former Secretary of Transportation Rodney Slater, Karol Denniston … Continue Reading
Our latest updated guide setting out the financial support measures available to businesses across Europe and the Middle East is now available here.… Continue Reading
Our guide sets out how different jurisdictions are changing their Insolvency Laws to help alleviate additional pressures placed on businesses as a consequence of cash flow pressures caused by COVID-19. This week’s updates include changes in the UK, Germany and Japan. Click here to see our guide.… Continue Reading
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
On Thursday, May 21, 2020, the American Bankruptcy Institute (ABI) hosted a webinar, featuring a distinguished panel of professionals, including former Speaker of the US House of Representatives John Boehner, as well as the current senior US Senator from West Virginia, Joe Manchin, who shared their thoughts on how best to safely and gradually re-open … Continue Reading
Bankruptcy is a term that tends to instill images of “For Sale” or “Everything Must Go” signs posted in windows, but this often is not the case. In fact, a bankruptcy filing is one way for a business to refocus its efforts and reorganize. Indeed, throughout history, many Fortune 500 companies have at some point … Continue Reading
Virtually every business—regardless of its size, nature (manufacturing, service, professional, tech) or particular industry—is currently suffering significant distress as a result of the unprecedented shutdown of huge portions of the U.S. (and global) economy. It is therefore clear that the number of businesses (and individuals) who will seek bankruptcy protection in the coming months will … Continue Reading
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
As the world grapples with the effects of the coronavirus disease 2019 (COVID-19) pandemic, state and local governments (collectively, State and Local Governments) are fighting for their financial health. The escalating costs of managing the COVID-19 crisis are straining State and Local Government budgets at a time when the taxes and revenues they rely on … Continue Reading
This alert on the Federal Reserve’s new $2.3tr lending program deserves special attention as this program will be of interest to every business operating in the U.S as well as to States, municipalities and potentially other public entities. It reports on guidance issued by the Federal Reserve on a new $2.3tr lending program (the first … Continue Reading
