Last month, the United States Bankruptcy Court for the Southern District of New York published proposed amendments to its local rules effective December 1, 2016 (the “Proposed Amendments”). Links to the Bankruptcy Court’s notice to the bar with respect to the Proposed Amendments and the full text of the Proposed Amendments are provided below. The
Business Bankruptcy Issues
Getting the Most Bang for Your 503(b)(9) Bucks
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…
Another Alternative Fee Arrangement Bites the Dust
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…
Five Things to Consider When Approached by a Bankruptcy Claims Trader
By Jonathan A. Grasso on
Posted in Bankruptcy, Business Bankruptcy Issues
When a business files for bankruptcy, it can be a confusing and frustrating time for the debtor’s creditors. If an investment firm reaches out with an offer to purchase a creditor’s claim against the debtor, it may appear to be a great opportunity to be paid at least some cash now. The sale of a…
Secured Creditors Beware: Liability Lurks in Lockboxes
By Jill B. Bienstock on
Posted in Business Bankruptcy Issues
Lenders and secured creditors often require that debtor-customers direct all receivable collections into a lockbox, hoping to wrangle any available proceeds to apply to their debtors’ outstanding debt. In requiring a debtor or its customer to remit payments to a lockbox, however, creditors may be overlooking a potential source of significant liability. A creditor using…
Is a “Sound Business Purpose” Always Enough?
By David W. Giattino on
Chapter 11 of the Bankruptcy Code trusts a debtor in possession to operate its business. In general, a debtor in possession “is free to use, sell[,] or lease property of the . . . estate in the operation of the debtor’s business.”1 This discretion is “at the heart” of the powers of a debtor …
Lenders Beware: Delaware Supreme Court Holds Creditors of Insolvent LLC Lack Derivative Standing
By Therese A. Scheuer on
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…
Dollar Amount Revisions Under Various Sections of the Bankruptcy Code Take Effect as of April 1, 2010
By John H. Drucker on
Posted in Business Bankruptcy Issues, Recent Developments
Pursuant to section 104(a) of the Bankruptcy Code (11 U.S.C. § 104(a)), starting April 1, 1998, and at each three year interval ending on April 1 thereafter, the dollar amounts in effect under various sections of the Bankruptcy Code are subject to adjustment. The adjustments are based upon the consumer price index, and a rounding…
Single Asset Real Estate Debtors: Challenges in the Bankruptcy Code
By Warren A. Usatine on
Posted in Business Bankruptcy Issues
Unlike retailers and manufacturers that file for chapter 11 protection, real estate owners and developers must be mindful of the restrictions and special expedited procedures the Bankruptcy Code imposes upon debtors whose estates consist of a single property or project (“Single Asset Real Estate” or “SARE” cases). In those cases, the automatic stay, which typically…