Weathering the storm: a routine foreclosure may be a preferential transfer

As many creditors have unfortunately discovered, the Bankruptcy Code allows a debtor to sue the creditor for certain payments – called preferences – that the creditor received from the debtor prior to the bankruptcy.

Filed under:
USA, Texas, Insolvency & Restructuring, Litigation, Haynes and Boone LLP, Bankruptcy, Credit (finance), Debtor, Collateral (finance), Foreclosure, Default (finance), Title 11 of the US Code
Authors:
Robert Albergotti , Robin E. Phelan , John Middleton
Location:
USA
Firm:
Haynes and Boone LLP
Weathering the storm: they said what they meant: 5th Circuit declines invitation to add requirements to safe harbor for forward contracts

The Bankruptcy Code provides a number of “safe harbors” for forward contracts and other derivatives. These provisions exempt derivatives from a number of Bankruptcy Code provisions, including portions of the automatic stay,1 restrictions on terminating executory contracts,2 and the method for calculating rejection damages.3 The safe harbor provisions also protect counterparties to certain types of contracts from the avoidance actions created under Chapter 5 of the Bankruptcy Code, such as the preference and fraudulent transfer statutes.4

Filed under:
USA, Insolvency & Restructuring, Litigation, Haynes and Boone LLP, Safe harbor (law), United States bankruptcy court, Fifth Circuit
Authors:
Robin E. Phelan , Trevor Hoffmann , John Middleton
Location:
USA
Firm:
Haynes and Boone LLP