Que Certa, Certa: Supreme Court’s Review of Puerto Rico Recovery Act May Hinder Creditor Negotiations
December 8, 2015| Blog
It is said that muddy water is best cleared by leaving it be. The Supreme Court’s December 4 decision to review the legality of Puerto Rico’s local bankruptcy law, the Recovery Act, despite a well-reasoned First Circuit Court of Appeals opinion affirming the U.S. District Court in San Juan’s decision voiding the Recovery Act on the grounds that it conflicts with Section 903 of the U.S. Bankruptcy Code, suggests, at a minimum, that at least four of the Justices deemed the questions raised too interesting to let the First Circuit have the last word.
December 1, 2015| Blog
Many of us have endured the nightmare of a disastrous home renovation or at least enjoyed Tom Hanks in The Money Pit (How long? Two weeks, of course). Well imagine spending half a million dollars, not for a new and improved home, but rather chasing your contractor for paid, but never completed, work.
November 2, 2015| Blog
Working for the Queen of Hearts is a tough gig. A disappointing quarter and she's quick to the chopping block. And the 'severance' she offers - "Off with their heads!" - no thanks.
October 28, 2015| Blog
Bill Kannel was recently quoted in The Deal's article “Taking bankruptcies too fast around the curve” regarding the growing trend of shorter, preplanned Chapter 11 cases. Experts debate the causes and effects including a potential link between case length and refilings as companies skim over key structural and operational issues in favor of more dynamic and immediate fixes.
A WARNing to Directors and Officers — Failure to Give Proper WARN Act Notice May Breach Your Fiduciary Duty
October 9, 2015| Blog
At first glance, Stanziale v. MILK072011, looks like someone suing over a bad expiration date and conjures up images of Ron Burgundy proclaiming “Milk was a bad choice.” But in actuality Stanziale is much more interesting: it answers whether one can breach their fiduciary duty by exposing an employer to a claim under the aptly-named WARN Act, which requires employers to tip off their workers to a possible job loss.
September 28, 2015| Blog
In a recent New York Law Journal article, “The Evolution of Fiduciary Duties Under Delaware Law”, John Bae and Kaitlin Walsh describe the ongoing development of Delaware law regarding directors’ duties and provide guidance to directors of corporations facing insolvency.
September 28, 2015| Blog
Last week, the Working Group for the Fiscal and Economic Recovery of Puerto Rico gave the broadest hint yet of the next tactic in Puerto Rico’s ongoing quest to deleverage itself.
September 21, 2015| Blog
Generally, once a plan of reorganization is confirmed and substantially consummated, an appellate court will not “unscramble the egg” and grant appellate relief if doing so would harm third parties that relied on the confirmation order.
August 31, 2015| Blog
In our prior post, we discussed the standard a creditor must meet to sue an insolvent corporation for breach of fiduciary duties, as laid out in the Quadrant Structured Products Co., Ltd. v. Vertin decision.
August 21, 2015| Blog
Dan Bleck was quoted in the Modern Healthcare article “Hospitals remain stressed, but don’t blame the ACA” addressing the misconception that the Affordable Care Act is the reigning force pushing healthcare providers into bankruptcy.
August 3, 2015| Blog
A Delaware bankruptcy court held in In re Ferris Properties, Inc. that the debtors could not sell their property free and clear of the secured lender’s mortgages because the lender would not be paid in full from the proceeds of the sale. Specifically, the Court held that the lender could not be compelled to accept a money satisfaction of its interests under section 363(f)(5), and that the lender did not consent to the sale under section 363(f)(2).
July 21, 2015| Blog
In the recent Third Circuit decision in In re Jevic Holding Corp. the Court of Appeals ruled that, in rare circumstances, settlements in bankruptcy cases can be approved even if they result in junior creditors receiving a distribution before senior creditors are paid in full (i.e., even if the settlement violates the "absolute priority rule").
Did The Supreme Court Finally Explain Stern? Examining the Wellness of Bankruptcy Court Jurisdiction
July 21, 2015| Blog
The Supreme Court has spoken once again on the limited jurisdiction of the bankruptcy courts, adding to the understanding derived from previous cases. Wellness International Network, Ltd., et al. v. Sharif is the Supreme Court’s sixth significant case exploring bankruptcy court jurisdiction under the Bankruptcy Code.
July 21, 2015| Blog
The Delaware Court of Chancery recently held that, for a creditor to have standing to bring a derivative breach of fiduciary duty action, the creditor need only establish that the corporation was insolvent at the time the creditor’s action was filed—not that the corporation continued to be insolvent until the date of judgment.
March 11, 2015| Advisory
There is little poetry in tobacco bonds these days. Cigarette consumption has declined beyond projections, and the advent of e-cigarettes may exacerbate the decline.
March 2, 2015| Advisory
When a company begins experiencing financial difficulty, shareholders often ask whether they may be liable under the Federal Worker Adjustment and Retraining Notification (“WARN”) Act for violations by the company.
December 19, 2014| Advisory
The Bankruptcy Code generally permits intellectual property licensees to continue using licensed property despite a licensor’s bankruptcy filing. However, because the “intellectual property” definition in the Bankruptcy Code does not include “trademarks,” courts have varied on whether trademark licensees receive similar protection.
Business Judgment Rule Protects Board's Decision to Maximize the Value of an Insolvent Delaware Corporation Even If It Puts Creditors at Risk; But It Does Not Protect Transfers of Value from the Corporation to a Controlling Shareholder or Related Party
October 31, 2014| Alert
Directors of an insolvent corporation face a host of difficult questions. Should they wind up operations or file for bankruptcy to preserve assets for creditors, or chart a riskier course that could lead the company back to profitability and possibly create value for shareholders?
Another Court Rules That Availability of Make-Whole Premiums in Bankruptcy Depends on Governing Documents
September 15, 2014| Advisory
In a recent bench decision in In re MPM Silicones, LLC et al., Case No. 14-22503-RDD (Bankr. S.D.N.Y. August 26, 2014), the Bankruptcy Court considered bondholders’ right to recover make-whole premiums (premiums paid for early repayment of debt) upon the payment of accelerated debt following the borrower’s bankruptcy default.
July 10, 2014| Advisory
Through our Public Finance Matters blog, Mintz Levin’s Bankruptcy and Public Finance practices have been covering the recent legislative developments in Puerto Rico. Our most recent blog posts provided a summary of the following developments.
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