Chapter 11 for the Smaller Guys. Until very recently, filing for Chapter 11 reorganization was a tool for larger businesses since the process is expensive and time consuming while the Debtor corporation seeks to negotiate deals with suppliers, utilities, service providers and other creditors. However, on February 19, 2020, the Small Business Reorganization Act
Chapter 11
Recent SDNY Decision Adds to the Fray: When Do Courts Approve Non-Consensual Releases?
By Jill B. Bienstock on
Posted in Bankruptcy
A “third-party release” in bankruptcy refers to a release that is given to a non-debtor party by other non-debtors – like creditors. Third-party release issues typically arise in the context of chapter 11 plan negotiations (which is essentially a contract between a debtor and its creditor constituents setting out the treatment of a…
Six Degrees of Separation: Use of Bankruptcy Rule 2004 Examination in Connection with Third-Party Litigation
Court: “You know, every piece of information and fact out there is within six degrees of separation of the debtors’ assets and financial affairs. The question is where do you draw the line?”
4/20/17 Transcript of hearing in In Re SunEdison, Inc., et al, Case No. 16-10992-smb (hereinafter “TR”), page 30 lines 6-11.…
Affirmed: New York’s Application of the In Pari Delicto Doctrine Bars Faithless Servant Claim and Bankruptcy Insider Exception
By John H. Drucker on
Posted in Bankruptcy, Recent Developments
A recent decision of the United States District Court for the Southern District of New York (the “District Court”), affirming a decision of the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”), further enforces the application of the in pari delicto doctrine in cases decided under New York law…
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 …
Second Circuit Finds Termination Premiums Non-Dischargeable in Bankruptcy
By Felice R. Yudkin on
Posted in Recent Developments
On April 8, 2009, the United States Court of Appeals for the Second Circuit, reversing a ruling by the United States Bankruptcy Court for the Southern District of New York, concluded that certain “termination premiums” due to the Pension Benefit Guaranty Corporation (“PBGC”) are not contingent pre-petition claims subject to discharge in a Chapter 11…