Prepetition, Millennium Lab Holdings II, LLC, Millennium Health, LLC, and RxAnte, LLC (the Debtors) reached a settlement with various government entities (the USA Settling Parties) relating to, among other things, claims against the Debtors for violations of the Stark law, Anti-Kickback Statute and False Claims Act (FCA). The Debtors also negotiated a restructuring support agreement

Many creditors who have supplied goods to a debtor before a bankruptcy case begins think their only prospects for recovery will be pennies on the dollar.  While often times, pre-petition claims are relegated to receive small, if any, distributions, there is a unique carve-out in Section 503(b)(9) of the Bankruptcy Code that elevates “goods” supplied

On Monday, May 16, 2016, the Supreme Court issued its decision in the case of Husky Int’l Elecs., Inc. v. Ritz, — S. Ct. —, 2016 WL 2842452 (2016) resolving a split between the Fifth and Seventh Circuit Courts of Appeal regarding the scope of the “actual fraud” exception to an individual debtor’s bankruptcy

On March 16, 2016, Judge Shannon of the U.S. Bankruptcy Court for the District of Delaware rejected a proposed fee structure for Baker Botts L.L.P., which was proposed counsel to the debtors in In re New Gulf Resources, LLC.  His ruling is the latest development from that court on the U.S. Supreme Court’s decision

Plaintiffs in a lawsuit bear a substantial burden when seeking to be certified as a class under federal law. Where the defendant commences a bankruptcy proceeding, and the plaintiffs seek to file a proof of claim on behalf of all class members, that burden becomes even greater and is rife with obstacles unique to the

Recent changes to the Federal Rules of Civil Procedure will significantly alter the discovery proceedings in bankruptcy proceedings, particularly in adversary proceedings. See Fed. R. Bankr. P. Part VII (applying FRCP to adversary proceedings) and Rule 9014(c) (applying FRCP to most contested matters). While not intended to be a comprehensive analysis, below are some key

Boomerang Systems, Inc. Et Al.
Boomerang Systems, Inc. (BMER, OTCBB), a developer of automated parking systems, and three
of its affiliates have filed chapter 11 petitions in Delaware. (Note: This filing does not appear to
be related to Boomerang Tube). The docket and other information about the case is available
through Garden City Group at

A lender’s entitlement to a make-whole premium, that is, a prepayment penalty designed to compensate the lender for the loss of interest payments it would have received had the borrower continued to service the debt through the maturity date of the loan, depends principally on the plain language of the bond indenture or credit agreement.  See, e.g., HSBC Bank USA, N.A. v. Calpine Corp. (In re Calpine Corp.), No. 07 Civ 3088 (GBD), 2010 WL 3835200, at *4 (S.D.N.Y. Sept. 15, 2010) (after reviewing the debt instruments, the district court agreed with the bankruptcy court insofar as it held that the lenders were not entitled to make-whole premiums because the plain language of the debt instruments did not provide for the payment of premiums in the event of payment pursuant to acceleration); In re Solutia, Inc., 379 B.R. 473, 485 n.7 (Bankr. S.D.N.Y. 2007) (where the indenture provided for automatic acceleration upon the filing of a chapter 11 petition but was silent as to whether any make-whole amount would or would not be payable in connection with such an acceleration, the court refused to “read into agreements between sophisticated parties provisions that are not there,” and held that no make-whole amount was due); Premier Entm’t Biloxi, LLC v. U.S. Bank N.A. (In re Premier Entm’t Biloxi LLC), 445 B.R. 582, 625-27 (Bankr. S.D. Miss. 2010) (trust indenture that provided for automatic acceleration of notes upon default arising from debtors’ bankruptcy filing rendered the notes mature at time of their repayment as part of consummation of debtors’ confirmed chapter 11 plan, such that noteholders had no contractual right to prepayment premium).
Continue Reading Latest Trends in the Enforceability of Make-Whole Premiums

The Delaware Supreme Court recently held that creditors lack standing to bring a derivative suit on behalf of an insolvent Delaware limited liability company (an “LLC”) under the Delaware Limited Liability Company Act (the “LLC Act”).  CML V, LLC v. Bax, No. 735, 2011 WL 3863132 (Del. Sept. 2, 2011