As a result of the meltdown of the financial markets, lenders are severely constricting new credit facilities and refusing to renew expiring facilities. The Bankruptcy Code's chapter 11 provides a powerful mechanism for an otherwise viable business to restructure and extend its outstanding debt and in many cases, reduce interest rates on loan facilities.
In these troubled times for the fashion and apparel industry, with consumer spending falling dramatically, many brands in need of capital will be forced to place their companies up for sale. This present a prime opportunity for companies looking to make a key acquisition.
On January 8, Senator Richard Durbin (D-IL), Senator Christopher Dodd (D-CT), Senator Charles Schumer (D-NY) and Representative John Conyers (D-MI) announced an agreement with Citigroup on legislation that would allow homeowners in bankruptcy to alter the terms of their mortgages. Citigroup has agreed to support the "Helping Families Save Their Homes in Bankruptcy Act," introduced by Senator Durbin on January 6, along with a companion bill that was introduced on the same day in the House of Representatives by Representative Conyers.
Fifth Circuit Court of Appeals: Insured Can Recover Damages for Mental Anguish under Louisiana Bad Faith Statute Where Insurer Acted in Bad Faith by Delaying Payments
January 9, 2009 | Print this page
On January 6, 2009, Senator Richard Durbin (D-IL) re-introduced H.R. 200, “Helping Families Save Their Homes in Bankruptcy Act.” First introduced in the fall of 2007 by Durbin in the Senate and by Rep. John Conyers (D-MI) in the House, this bill has been the subject of three hearings, but faces opposition primarily from Republicans and representatives of the mortgage industry.
A common strategy for acquiring the business of a troubled company is to purchase assets rather than acquire all outstanding capital stock of the target, based on the general principle that a purchaser of assets is not responsible for liabilities of its seller absent an express or implied assumption. Does the strategy work?
Conventional wisdom was that bankruptcy and insolvency were not major considerations when receiving outsourcing services from reputable, credit-worthy suppliers.
Financial advisors, investment bankers, lawyers and other professionals in reorganization cases should pay close attention to a decision of the U.S. Court of Appeals for the Second Circuit handed down on Jan. 6, 2009. In re Smart World Technologies, LLC, ___ F.3d ___ (2d Cir. 1/6/2009).
The collapse of Lehman Brothers was a major test of the procedures developed by market participants to address counterparty credit risk and has uncovered deficiencies in risk management policies and their application.
When a creditor seeks equitable relief in a bankruptcy court, must the court always follow common law principles of equity? Not according to several courts, including the Second Circuit. Concluding that the granting of equitable remedies may circumvent the Bankruptcy Code's equitable distribution system, courts have limited the application of equitable remedies in the bankruptcy context.