The U.S. Supreme Court recently handed down three rulings potentially impacting bankruptcy cases.
Nunc Pro TuncRelief
In Roman Catholic Archdiocese of San Juan v. Acevedo Feliciano, No. 18-921, 2020 WL 871715 (U.S. Feb. 24, 2020), the Court circumscribed the use of nunc pro tunc ("now for then") orders that make relief ordered by a court apply retroactively to an earlier point in time.
While the full extent of COVID-19's effect on the economy remains to be seen, the pandemic will likely create significant restructuring activity for companies already experiencing financial distress and otherwise healthy companies distressed by the pandemic. We have already seen an increase in Chapter 11 filings, and more will follow.
Coronavirus Aid, Relief, and Economic Security (CARES) Act
The ability of a bankruptcy trustee or a chapter 11 debtor-in-possession ("DIP") to use "cash collateral" during the course of a bankruptcy case may be vital to the debtor's prospects for a successful reorganization. However, because of the unique nature of cash collateral, the Bankruptcy Code sets forth special rules that apply to the nonconsensual use of such collateral to protect the interests of the secured creditor involved. The U.S. Bankruptcy Court for the Eastern District of Washington examined these requirements in In re Claar Cellars, LLC, 2020 WL 1238924 (Bankr. E.D.
Hogan Lovells Publications | 03 June 2020
A creditor's game plan in Chapter 11: Five things to consider
The Covid-19 pandemic has caused significant disruption to the global economy, and the asset management industry is no exception. Fund sponsors have been focusing significant time, efforts and resources supporting their portfolio investments through the crisis.
Seyfarth Synopsis: In acquiring a company in bankruptcy, there is often a tendency to think this guarantees the purchaser will be “free and clear” of any liability (including so-called “successor liability”). This is not necessarily so with wage and hour liability, particularly if the purchaser merely continues to operate virtually the same business that was acquired.
This advisory outlines the various options available to landlords after service of a statutory demand on a tenant and the tenant does not pay the debt. It also summarises the general processes, costs, advantages and disadvantages of each option. These options include:
Issuers face numerous restructuring alternatives, both within and outside the bankruptcy process
Businesses in a wide range of industries may now be forced to consider bankruptcy given the unprecedented economic challenges caused by the COVID-19 pandemic. This advisory is designed to provide a high-level view of issues to be considered by human resources when considering filing for Chapter 11 bankruptcy. Please note that this advisory focuses specifically on a Chapter 11 bankruptcy (pursuant to which a business will be reorganized) rather than Chapter 7 bankruptcy (pursuant to which a business will be liquidated).