Bankruptcy is a formal process geared toward preserving stakeholder value. Often, the proceedings include negotiations between stakeholders that are arduous, time-consuming and expensive. Positioning the company for healthy and sustainable growth is often viewed as a postemergence priority, as companies naturally prioritize the near-term financial realities threatening their very survival. 

Every now and then we get an example of how a process should work.

That’s exactly what we have, regarding confirmation of a contested Subchapter V plan, in the case of In re Lapeer Aviation, Inc., Case No. 21-31500 in the Eastern Michigan Bankruptcy Court.

In an opinion issued October 12, 2022, (Doc. 264), the Lapeer Court declares that, (i) most of the plan confirmation standards are satisfied, but (ii) the plan is deficient under two confirmation standards and, therefore, cannot be confirmed.

The Irish Minister for Enterprise, Trade and Employment signed into law the European Union (Preventive Restructuring) Regulations 2022 on 29 July 2022. This is the first significant piece of legislation dealing with corporate rescue in Ireland since 1990, when the jurisdiction's examinership process was first codified.

In In re Roberts, No. 22-10521, 2022 WL 4592086 (Bankr. D. Colo. Sept. 23, 2022), the Bankruptcy Court of the District of Colorado (the “Bankruptcy Court”) held that a Debtor’s alleged ownership interest in cannabis-related companies did not require a dismissal of the case and that a Chapter 7 trustee could administer the Debtor’s assets. This represents a significant change from prior decisions from this Court, which has usually dismissed any bankruptcy case involving cannabis.

Background

How did we get here?

The crypto markets were rocked again last week by the collapse and bankruptcy of FTX and Alameda Research. Within a few short days, Sam Bankman-Fried (SBF) and his companies went from a stabilizing force for markets and acting as an industry leader to causing one of the greatest disruptions in digital asset market history.

Crypto investors were dealt another blow on November 11 when FTX, the world’s second-largest cryptocurrency exchange, filed for chapter 11 bankruptcy relief in the District of Delaware, along with more than 130 related companies and affiliates. The bankruptcy was spawned by liquidity issues brought on by the sudden collapse in value of FTX’s crypto assets. Starting on November 6, customers simultaneously attempted to withdraw their funds and assets from the exchange, causing a situation akin to a classic bank run that led to an estimated $32 billion in value quickly evaporating.

Layoffs often accompany corporate bankruptcy, and employers should be aware of the legal obligations that impact mass layoffs and plant closures. Most notably, the federal WARN Act requires employers to notify the workforce of a mass layoff, a temporary shutdown, or a closure of all or part of a business.

Employers that fail to provide adequate notice could be on the hook for damages of back pay and benefits-related compensation per employee for each day the company violated the WARN Act (up to 60 days).

2022. 11. 11. 가상자산(암호화폐) 거래소인 FTX가 미국 델라웨어주 파산법원(United States Bankruptcy Court for the District of Delaware)에 미국 도산법 제11장(U.S. Bankruptcy Code Chapter 11)에 따른 보호절차 신청을 하였습니다. 신청 대상은 가상자산 트레이딩 기업인 Alameda Research를 포함하여, 세계 각국에 위치한 FTX 그룹 계열사 전체인 총 134개사입니다. 이 중에는 한국 회사인 한남그룹㈜가 포함되어 있습니다. 위 보호절차 신청서에 의하면, FTX 그룹의 채권자는 10만 명 이상이고, 부채의 규모는 유동적이나 100억~500억 달러에 이르는 것으로 전해졌습니다.

현재 이 사건 신청에 부여된 사건명은 “FTX Trading Ltd., Alameda Research LLC et al”입니다. 즉 한국 회사인 한남그룹㈜를 포함하여 위 134개 회사에 대한 Chapter 11 절차는 FTX Trading Ltd 및 Alameda Research와 함께 델라웨어주 파산법원에서 하나의 절차로 동시에 진행될 예정입니다.

In Matter of J.C. Penney Direct Marketing Services, L.L.C.,¹ the United States Fifth Circuit Court of Appeals clarified the extremely deferential standard afforded to a debtor’s “business judgment” decision to reject an unexpired lease under section 365 of the Bankruptcy Code and affirmed the Bankruptcy Court’s ruling allowing rejection of a ground lease notwithstanding allegations of a debtor-sublessor’s bad faith dealings in its negotiations with a sublessee.

Background

Bankruptcy is a formal process geared toward preserving stakeholder value. Often, the proceedings include negotiations between stakeholders that are arduous, time-consuming and expensive. Positioning the company for healthy and sustainable growth is often viewed as a post- emergence priority, as companies naturally prioritize the near-term financial realities threatening their very survival.