Yen Sum and James Hollingshead, Latham & Watkins LLP
This is an extract from the second edition of GRR's The Art of the Ad Hoc. The whole publication is available here.
Introduction
It may seem counterintuitive for banks and other lenders to provide loans to companies in bankruptcy, but they often do. All companies, especially those in bankruptcy, need liquidity to continue operating. Ensuring the availability of cash is one of the most important considerations in a Chapter 11 reorganization because debtors are often unable to reorganize without adequate cash flow.
Straffi v Aeris Bank (In re Hillesland), No. 1925278( CMG), 2020 Bankr. LEXIS 2235 (Bankr. D.N.J. Aug. 17, 2020).
Case Snapshot The Bankruptcy Court held that a chapter 7 trustee could avoid judgment creditor’s lien pursuant to his “strongarm” powers under section 544(a) of the bankruptcy code because the judgment creditor did not make a good faith effort to locate debtor’s personal property before it levied against real property, as required under applicable New Jersey law.
In re Tribune Company, et al. No. 182909 (3d Cir. filed Aug. 26, 2020).
Case Snapshot
Changes in Farm and Agriculture Bankruptcy
In 2019, the Small Business Reorganization Act (SBRA) and the Family Farmer Relief Act (FFRA) were passed to help American farmers who have seen an increase in financial difficulties. Recently, farms have seen a rise in debt due to market disruptions, poor weather, and lower income. The SBRA and the FFRA were passed in order to increase the ease and accessibility of Chapter 11 and Chapter 12 bankruptcies.
Summary of decisions In re Body Transit, Inc., No. BR 2010014 ELF, 2020 WL 1486784 (Bankr. E.D. Pa. Mar. 24, 2020).
Natasha Harrison, Fiona Huntriss and Nick Turvey, Boies Schiller & Flexner
This is an extract from the second edition of GRR's The Art of the Ad Hoc. The whole publication is available here.
Overview
On Monday, November 30, Bankruptcy Judge Marvin Isgur approved a request by Ultra Petroleum and its affiliated debtors that he certify his October 26, 2020 memorandum opinion for direct review by the United States Court of Appeals for the Fifth Circuit.
As lenders prepare for a world with an increased risk of borrower failures, liquidations, and bankruptcies, many have begun focusing on requiring that borrowers form special purpose entities (“SPEs”) to mitigate against those risks. In this publication, we explore how recent case law has viewed the formation and use of SPEs and which structures have been more effective than others.
Current State of the Law Regarding Bankruptcy Remote Entities
On December 1, 2020, certain amendments to the Federal Rules of Bankruptcy Procedure take effect. The amendments largely modify rules governing bankruptcy appeals, but also impact Rules 2002 and 2004. The changes are as follows: