It is well settled that creditors of an insolvent corporation can obtain derivative standing to pursue claims for breach of fiduciary duty against officers and directors. The same principle, however, does not always apply for creditors of limited liability companies (LLCs) and limited partnerships (LPs). The Delaware Bankruptcy Court in Gavin/Solmonese LLC v. Citadel Energy
Patrick J. Reilley
The Fifth Circuit Considers Enforceability of Blocking “Golden Share” Provisions
By Patrick J. Reilley on
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…
Recent Bankruptcy Court Decisions Address Bankruptcy Code Section 365
By Patrick J. Reilley on
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…