Tag Archives: chapter 11

(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

Envision’s Bankruptcy Provides Insight Into All That is Ailing The Healthcare Industry

The increase in bankruptcy filings that restructuring professionals have been expecting is now arriving.  With rising inflation, increased interest rates, tightening credit markets, labor shortages and supply chain disruptions, we are starting to see a dramatic increase in filings.  Last week the American Bankruptcy Institute noted that commercial Chapter 11 filings increased 105% in May … Continue Reading

Delaware Bankruptcy Court Approves DIP Financing of 700 Bitcoin

On May 8, 2023, online cryptocurrency exchange platform Bittrex, Inc. and three of its affiliated entities (collectively “Bittrex”) filed for chapter 11 to wind down their U.S. and long-dormant Malta operations.  The bankruptcy filing followed costly regulatory investigations and an April 17, 2023 SEC enforcement action alleging that Bittrex improperly sold crypto assets that were … Continue Reading

MOAC Mall Holdings LLC v. Transform Holdco LLC – The US Supreme Court Unanimously Rules That Section 363(m) Is Not Jurisdictional

On April 19, 2023 the Supreme Court issued its unanimous ruling in MOAC Mall Holdings LLC v. Transform Holdco LLC, 528 U.S ____ (2023), holding that the limitations contained in section 363(m) of the United States Bankruptcy Code are not jurisdictional.  The Supreme Court’s ruling not only resolved a split amongst the circuits, but it … Continue Reading

Highland Capital Fails Bid to Recuse Presiding Judge (US)

In January, we wrote about Highland Capital Management, L.P. and the reorganized debtor’s filing of a petition for a writ of certiorari, by which the reorganized debtor asked the Supreme Court to consider whether section 524(e) of the Bankruptcy Code prohibits non-debtor exculpations.  Now for something completely different.  Earlier this month, the Bankruptcy Court for the … 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

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

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

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

COVID-19 Emergency Bankruptcy Reform – A Call For Action!

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

How does the EU Restructuring Directive compare to Chapter 11?

On June 26, 2019, the European Parliament and the Council of the European Union published a new EU Restructuring Directive on preventive restructuring frameworks, discharge of debt and disqualifications, and measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt (“Directive”). This is an extraordinary achievement given the existing differences in … Continue Reading

The Small Business Reorganization Act Reintroduced: A Way Forward for Small Business Reorganization?

Last month, Congress reintroduced the Small Business Reorganization Act (“SBRA”), under which a new subchapter V would be added to chapter 11 of the United States Bankruptcy Code.  This new subchapter would provide small businesses with aggregate liabilities that do not exceed $2,566,050 with an opportunity to resolve outstanding liabilities through a streamlined and cost‑effective … Continue Reading

Protecting Committee Members – Ninth Circuit Expands Protections Afforded to Individual Committee Members

In a recent opinion, the United States Court of Appeals for the Ninth Circuit expanded the protections afforded to individual members of an official creditors’ committee against certain lawsuits.  Specifically, in In re Yellowstone Mountain Club, LLC, 841 F.3d 1090 (9th Cir. 2016), the Court unanimously held that the Barton doctrine (also known as the … Continue Reading

Gibraltar Court Recognises Chapter 11 Bankruptcy as a Foreign Main Proceeding

Peabody Energy Corporation is one of the biggest energy companies in the world. Its main business is coal mining and it conducts extensive operations in the United States and in Australia. Peabody had been hit by declining coal prices both for thermal coal and also for metallurgical coal used for steel making, especially due to the declining demand from … Continue Reading

English Court decides who can be a foreign representative under Cross-Border Insolvency Regulations 2006

The English Court has recently considered who can be  recognised as  “foreign representatives” under the Cross-Border Insolvency Regulations 2006 (CBIR) in the case of Re 19 Entertainment Limited, about a US company in Chapter 11. The Re 19 Entertainment judgment appears to be the first English case where directors of a company in Chapter 11 … Continue Reading

More Bad News for Bankruptcy Professionals – Baker Botts v ASARCO is Back Like a Boomerang

Last June, the Supreme Court issued a ruling in Baker Botts LLP v. ASARCO, LLC, which dramatically altered expectations that had previously been fairly widely accepted in many areas – the right of professionals representing debtors and creditors committees to be reimbursed by the estate for fees incurred in defending objections to their fees.  In ASARCO, the Supreme … Continue Reading

Cherry picking from the global insolvency tree, the road to harmonisation

Complex multi-jurisdictional insolvencies are an inevitable consequence of the increasingly global nature of big business. The collapse of the likes of Barings, Enron and most recently Lehmans (the latter involving insolvency proceedings in some 16 jurisdictions) have highlighted the growing need for legislative action to promote cross-border co-operation and protect the interests of international creditors. … Continue Reading

Here Today, Gone Tomorrow: Confirmation of a Chapter 11 Plan Could Strip Your Liens if You’re Not Careful

On August 4, 2015, the Second Circuit weighed in for the first time on the circumstances in which the confirmation of a Chapter 11 plan could strip a secured creditor of its lien. In City of Concord, N.H. v. Northern New England Telephone Operations LLC (In re Northern New England Telephone Operations, LLC), the Second … Continue Reading
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