Stoneway was advised in its CBCA proceedings by a team including: Kevin Zych, Michael S. Shakra and Joshua Foster (Restructuring & Insolvency); Richard Swan (Litigation); Kristopher Hanc (Capital Markets); Thomas Bauer and Philip Ward (Tax); and Preet K. Gill (Complex Legal Issues and Opinions).
Introduction
Unitranche financing began as a middle-market product, tracing its origins to the days of recovery from the global credit crisis. The credit markets re-opened with an explosion of available capital from traditional lenders, business development companies and other direct lenders. With an increasing supply of capital, leverage shifted to borrowers and private equity, allowing them to better dictate the terms and conditions of their loan facilities. With the greater prevalence of so-called “covenant-lite” loans, also came the exponential growth of the unitranche market.
Introduction
They are all the rage: People are forming decentralized autonomous organizations (DAOs) as vehicles to purchase or bid on a wide range of assets—NFL teams, golf courses, fossil-fuel companies, even a copy of the U.S. Constitution.
The issue of whether directors, officers, and/or shareholders breached their fiduciary duties to a company prior to bankruptcy is commonly litigated in chapter 11 cases, as creditors look to additional sources for recovery, such as D&O insurance or “deep-pocket” shareholders, including private equity firms. The recent decision in In re AMC Investors, LLC, 637 B.R. 43 (Bankr. D. Del. 2022) provides a helpful reminder of the importance of timing in bringing such claims and the use by defendants of affirmative defenses to defeat those claims.
What the heck does this mean:
“(1) Debtor.—The term ‘debtor’— . . . (B) does not include— . . . (Iii) any debtor that is an affiliate of an issuer, as defined in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c)”
—from Subchapter V’s eligibility statute, § 1182 (emphasis added).
Since the inception of Subchapter V, I’ve been trying to figure that meaning out.
Here’s the progression of thinking:
IMAGINE THE FOLLOWING SCENARIO: WITHOUT FIRST CONSULTING ITS LAWYERS, your firm’s major client, Hapless Client, LLC (“Hapless”) entered into a horrible one-sided contract with Sketchy Business, Inc. (“Sketchy”). To make matters worse, Sketchy just filed a contract claim against Hapless to enforce that contract, and Sketchy’s complaint seeks massive damages that could put Hapless out of business permanently. An interview with Hapless confirms the truth of the essential allegations of the complaint.
Sometimes a dissipation-of-assets claim under the IMDMA isn't enough when a recalcitrant spouse hedes assets. Never fear - the Illinois Uniform Fraudulent Transfer Act may be the answer.
Last November, in In re LTL Mgmt. LLC, 1 Bankruptcy Judge Craig Whitley in Charlotte, North Carolina, ordered LTL Management LLC’s Chapter 11 bankruptcy case moved to New Jersey after finding that LTL Management had used the “Texas Two-Step” to manufacture jurisdiction in North Carolina improperly. LTL Management is a subsidiary of Johnson & Johnson (“J&J”) and a defendant in thousands of talc-related tort claim lawsuits.
How are private practice mediators compensated in a bankruptcy case—procedurally?
We have a new court order providing guidance on how such procedures can work.
The new guidance is from Sears Holding Corp. v. Lampert (In re Sears Holdings Corp.), Adv. Pro. No. 19-08250, SDNY Bankruptcy Court.
Mediation Order