July 10, 2017 | Blog | By Kevin Walsh
Exculpation provisions in operating agreements must be carefully crafted in order to protect members, managers, directors and officers for breaches of fiduciary duties. In In re Simplexity, LLC, the Chapter 7 trustee sued the former officers and directors (who were also members and/or managers) for failing to act to preserve going concern value and exposing the debtors to WARN Act claims.
July 5, 2017 | Blog | By Kaitlin R. Walsh
The Supreme Court has granted certiorari to decide the question of whether bankruptcy courts should apply state law or a federal rule of decision when determining whether to recharacterize a debt claim as a capital contribution.
First Circuit Rules that Bankruptcy Court “Retention of Jurisdiction” Provisions Not Enough to Establish Jurisdiction
June 15, 2017 | Blog | By Adrienne K. Walker
It is very common for bankruptcy court orders to provide that the court retains jurisdiction to enforce such orders. Similarly, chapter 11 confirmation orders routinely provide that the bankruptcy court retains jurisdiction over all orders previously entered in the case.
May 15, 2017 | Blog | By Kaitlin R. Walsh
Earlier this month, the Supreme Court announced that it will review the scope of Bankruptcy Code section 546(e)’s safe harbor provision. Section 546(e) protects from avoidance those transfers that are made “by or to (or for the benefit of)” a financial institution, except where there is actual fraud.
May 9, 2017 | Blog | By Kevin Walsh
As noted in a recent Distressing Matters post, the United States Supreme Court in In re Jevic Holding Corp. held that debtors cannot use structured dismissals to make payments to creditors in violation of ordinary bankruptcy distribution priority rules.
April 19, 2017 | Blog | By Eric Blythe
In a recent American Law Journal article, "When Hiding Assets Doesn't Work: How Mintz Recovered $20M for Cheated Client," Daniel Pascucci and Joe Dunn detail the extensive efforts used to hold a judgment creditor accountable -- 10 years and $20 million later, the case exemplifies the old saying that you can run, but you can't hide.
April 11, 2017 | Blog | By Aaron Williams
In 2015, Distressing Matters reported on the Third Circuit’s decision in In re Jevic Holding Corp., wherein that panel ruled that, in rare circumstances, bankruptcy courts may approve the distribution of settlement proceeds in a manner that violates the Bankruptcy Code’s statutory priority scheme.
March 28, 2017 | Blog | By Amanda M. Blaske
The filing of a bankruptcy case puts in place an automatic injunction, or stay, that halts most actions by creditors against a debtor. But can a creditor violate the automatic stay by not acting?
Delaware Bankruptcy Court Issues Important Guidelines Concerning Payment of Indenture Trustee's Professional Fees
March 15, 2017 | Blog | By Paul J. Ricotta
In Nortel Networks, Inc., Case No. 09-0138(KG), Doc. No. 18001 (March 8, 2017), the Delaware Bankruptcy Court ruled on the objections of two noteholders who asked the Court to disallow more than $4.4 million of the $8.1 million of the fees sought by counsel to their indenture trustee.
February 28, 2017 | Blog | By Kevin Walsh
One of the most powerful and oft used devices in bankruptcy is the sale of assets “free and clear” of liens, claims and interests. One issue a buyer at a bankruptcy sale must consider, however, is whether due process has been met with respect to parties whose liens, claims and/or interests are released through such sale.
February 13, 2017 | Blog | By Charles W. Azano
There are numerous reasons why a company might use more than one entity for its operations or organization: to silo liabilities, for tax advantages, to accommodate a lender, or for general organizational purposes. Simply forming a separate entity, however, is not enough.
Make-Whole Momentum Halted: Third Circuit Rejects Momentive Rationale and Requires Debtor to Pay Make-Whole Premium
November 28, 2016 | Blog | By Kaitlin R. Walsh
In a recent decision (“Energy Future Holdings”) poised to have wide-reaching implications, the Third Circuit Court of Appeals reversed the decisions of the Bankruptcy and the District Courts to hold that a debtor cannot use a voluntary Chapter 11 bankruptcy filing to escape liability for a “make-whole” premium if express contractual language requires such payment when the borrower makes an optional redemption prior to a date certain.
October 19, 2016 | Blog | By Kevin Walsh
A recent opinion issued by the United States District Court for the Northern District of Illinois reminds us that corporate veil-piercing liability is not exclusive to shareholders. Anyone who is in control of and misuses the corporate structure can be found liable for the obligations of the corporation.
June 29, 2016 | Blog | By Eric Blythe
In an earlier blog piece we reported on the Third Circuit's 2015 decision in In re Jevic Holding Corp. where the Court approved a settlement, implemented through a structured dismissal, which allowed junior creditors to receive a distribution prior to senior creditors being paid in full. The decision was appealed and the Supreme Court agreed to hear the case and decide whether structured dismissals are permissible in bankruptcy.
TRANQUIL WATERS ONCE AGAIN IN THE SAFE HARBOR: Bankruptcy Safe Harbor Protects Shareholders From State Constructive Fraud Claims
April 13, 2016 | Blog | By Kevin Walsh
Shareholders who received nearly $8 billion from the Tribune Company leveraged buyout (LBO) do not have to give back that money as a constructive fraudulent transfer.
Oil, Gas and Mineral Companies Take Note: Agreements Purporting to “Run with the Land” may be Rejected in Bankruptcy
April 6, 2016 | Blog | By Kevin Walsh
A recent bankruptcy court decision from the influential Southern District of New York permitted a debtor to reject executory contracts with midstream gathers as an exercise of sound business judgment.
You Can Lead a Horse to Water, But You Can’t Call it an Airplane: Supreme Court Oral Arguments Suggest Puerto Rico’s Recovery Act May Recover
March 24, 2016 | Blog | By William Kannel
A few thoughts on Tuesday’s oral arguments before the U.S. Supreme Court in the litigation over whether Puerto Rico’s Public Corporations Debt Enforcement and Recovery Act, an insolvency statute for certain of its government instrumentalities, is void, as the lower federal courts held, under Section 903 of the U.S. Bankruptcy Code:
March 15, 2016 | Blog | By Kevin Walsh
In the Ultimate Escapes bankruptcy case, the U.S. District Court for the District of Delaware recently held that the “business judgment rule” may protect fiduciaries who negotiate and enter into unconventional financing agreements in an attempt to save the company. In short, a failed business strategy by itself does not lead to liability for breach of fiduciary duty.
Draft Treasury Legislation Would Give Puerto Rico Access to “Super Chapter 9” and Chapter 9 Bankruptcy
February 25, 2016 | Blog | By Eric Blythe
A draft of the U.S. Treasury’s proposed debt restructuring legislation began circulating earlier today. The draft legislation would give Puerto Rico, as well as other U.S. territories, and their municipalities access to U.S. bankruptcy court under a new chapter of the U.S. Bankruptcy Code (so-called “Super Chapter 9”) as well as making Puerto Rico’s instrumentalities (but not Puerto Rico itself) potentially eligible to file for bankruptcy under existing Chapter 9.
February 23, 2016 | Blog | By Eric Blythe
Mintz was recently honored at the 10th Annual M&A Advisor Awards dinner with the Restructuring Community Impact Award in connection with the Acquisition of Assets of Alsip Acquisition, LLC by Paper Mill Acquisition LLC.
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