In a recent decision, Heritage Home Group LLC, et al., Case No. 18-11736-KG, 2018 WL 4684802 (Bankr. D. Del. Sept. 27, 2018), Judge Kevin Gross, U.S. Bankruptcy Judge for the District of Delaware, held that a consultant tasked with liquidating the debtors’ assets under a store closing and asset disposition agreement (“Disposition Agreement”) is not
Bankruptcy
The Fifth Circuit Considers Enforceability of Blocking “Golden Share” Provisions
Bankruptcy remote structures have become common in recent years to attempt to prevent a borrower from filing for Chapter 11. One such structure is commonly referred to as a “golden share.” The “golden share” typically refers to a noneconomic membership interest provided to a lender whose vote would be necessary for the borrower to file…
New York Bankruptcy Court Permits Discovery Requests in Chapter 15 Case Despite Potentially Conflicting Cayman Islands Law
On April 17, 2018, the U.S. Bankruptcy Court for the Southern District of New York (the “Court”) issued a decision requiring CohnReznick LLP (“CohnReznick”) to produce documents requested by the foreign representatives (the “Foreign Representatives”) in the chapter 15 case of Platinum Partners Venture Arbitrage Fund (International) Limited (in…
The Supreme Court Clarifies the Scope of Section 546(e)’s Safe Harbor for Securities Related Transactions in Merit Management Group, LP v. FTI Consulting, Inc.
The Bankruptcy Code gives a bankruptcy trustee, or the debtor in possession, the power to “avoid” certain transfers made by the debtor at various times before filing for bankruptcy relief. Congress provided a number of limits on these significant avoidance powers, whether within the sections granting the powers themselves (e.g., in Section 547(c), which sets…
Recent Bankruptcy Court Decisions Address Bankruptcy Code Section 365
Section 365 of the Bankruptcy Code provides that a debtor “subject to the court’s approval, may assume or reject any executory contract or unexpired lease of the debtor.” 11 U.S.C. § 365. This provision is a powerful tool because it allows a chapter 11 debtor to assume agreements that will be beneficial to restructuring efforts…
Ninth Circuit Affirms “Per Plan” Approach to Interpret “Impaired Accepting Class” for Bankruptcy Plan Confirmation Purposes
In JPMCC 2007-C1 Grasslawn Lodging, LLC v. Transwest Resort Props. Inc., et al. (In re Transwest Resort Props. Inc.), Case No. 16-16221, 2018 U.S. App. LEXIS 1947 (9th Cir. Jan. 25, 2018), the Ninth Circuit was the first Circuit court to decide a significant split in the lower courts between the “per plan” or…
Tidewater Inc. Settles Its Remaining Charter Agreement Rejection Damage Claim After Judge Shannon Found Stipulated Loss Value Provision to be an Unenforceable Penalty
On November 28, 2017, Tidewater Inc. and its affiliated debtors (collectively, the “Tidewater Debtors”) withdrew their motion objecting to final allowance of rejection damage claims of Fifth Third Equipment Finance Company (“Fifth Third”). The notice of withdrawal indicated that Fifth Third, the sole remaining non-settling vessel lessor, resolved its dispute with the Tidewater Debtors pursuant…
Virginia is for Lovers … And Chapter 11?
It’s no secret that Delaware, New York (Southern District), and Texas (at least since the oil and gas crisis) have become known as the “hotspots” for filing large chapter 11 bankruptcy cases. Whether due to desirable precedent, well qualified judges, the responsiveness of the Courts to the need for prompt scheduling of hearings, or a…
The Bankruptcy and Construction Junction: Making Your Texas Mechanic’s Lien Function Better in Bankruptcy
In order to secure a real property owner’s payment obligation, contractors, mechanics, materialmen, and other workmen are often granted a lien referred to by a variety of names including, materialmen’s liens, workmen’s liens, and mechanic’s liens. While the parlance varies by jurisdiction, they are generally referred to as mechanic’s liens in Texas—even in the context…
A Degree Too Far: NY Bankruptcy Court Denies Debtors’ Request For Bankruptcy Rule 2004 Examination in Connection with Third-Party Litigation
History: In a June 14, 2017, bankruptcy blog titled “Six Degrees of Separation: Use of Bankruptcy Rule 2004 Examination in Connection with Third-Party Litigation“, we reported on what appeared to be a case of first impression that arose in a case pending before United States Bankruptcy Judge Stuart Bernstein in the…