Lenders often require their borrowers to be “special purpose entities” in real estate transactions. This is a way that lenders can mitigate their bankruptcy risk in the event that the borrower or any of its parent entities file for bankruptcy. In addition, since most real estate financing is non-recourse, lenders require that the borrower is a separate, special purpose entity so that no other property or business will impact the property which is the subject of the underlying loan.

On April 19, 2021, the United States Bankruptcy Court for the Eastern District of Virginia granted a motion (the “Seal Motion”) filed by the Intelsat S.A. debtors (the “Debtors”) to seal the hearing on the Debtors’ motion to extend exclusivity and motion to compel plan mediation.

“The discharge of claims in bankruptcy applies with no less force to claims that are meritorious, sympathetic, or diligently pursued. Though the result may chafe one’s innate sense of fairness, not all unfairness represents a violation of due process.”

In the US distressed market, liability management has emerged as an effective and widely accepted tool to increase liquidity, restructure debts and extend a borrower’s runway to help it avoid insolvency. However, although not unheard of, it is yet to achieve the same prevalence in Europe, where documents are still catching up to the level of flexibility seen in the US, and different capital structures and legal regimes raise different issues.

.A look at relevant employment laws and litigation vulnerabilities that companies, including their owners, officers and directors, should consider before ceasing operations or filing for bankruptcy. 

On April 24, 2021, Augustus Intelligence Inc., a New York based AI systems developer, filed a petition under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware (Case No. 21-10744). The company reports $10 million to $50 million in assets and $1 million to $10 million in liabilities.

In a March 2021 decision in the jointly administered bankruptcy cases of Fencepost Productions, Inc. and certain of its affiliates, Judge Dale L.

A recent case shows how even late payments can be used to satisfy the ordinary course of business defense in a preference avoidance action. Baumgart v. Savani Props Ltd. (In re Murphy), Case No. 20-11873, Adv. Pro. No. 20-1070, 2021 Bankr. LEXIS 1035 (Bankr. N.D. Ohio Apr. 19, 2021).

On April 26, 2021, Royal Blue Realty Holdings, Inc., a New York-based real estate company, filed a petition under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Southern District of New York (Case No. 21-10802). The company reports $1 million to $10 million in assets and $10 million to $50 million in liabilities.

Third-party releases, particularly releases of non-debtor affiliated guarantors, are commonly a critical feature of a successful cross-border restructuring. In U.S. restructurings, where New York law typically governs the arrangements among a borrower, its lenders/noteholders and its guarantors, the restructuring or release of the primary obligor does not, without more, result in the restructuring or release of the guarantors’ obligations in respect of the guarantees. For this reason, in U.S.