Summary
In a 32 page decision signed January 3, 2012, Judge Walrath of the Delaware Bankruptcy Court ruled that holders of litigation tracking warrants that would be paid out in stock of the debtor were equity instruments, and would be paid out at the same priority as common equity under the bankruptcy plan. Judge Walrath’s opinion is available here (the “Opinion”).
Background
Summary
Introduction
It is not uncommon for firms to use standard language in their account agreements that creates liens on Individual Retirement Accounts (IRAs). Two recent federal court decisions, however, suggest that granting such a lien on an IRA may constitute a prohibited transaction that causes these accounts to lose their tax exempt status, which in turn could potentially make IRAs subject to third-party creditor claims. These two decisions could have far-reaching implications for any firm that has used or still uses similar lien-creating language in their account agreements.
The usual Friday release of a large number of letter rulings by the IRS included several rulings of interest on reorganizations and consolidated return issues.
Many creditors have had the unfortunate experience of receiving a demand letter or adversary complaint alleging that they received avoidable transfers—commonly known as "preferential payments" or "preferences"—during the 90 days preceding a customer's federal bankruptcy filing. Such claims arise under section 547 of the Bankruptcy Code, and can result in a creditor having to return certain payments made during the 90-day preference period.
Introduction
On February 10th, electricity operator LSP Energy LP ("LSP") filed chapter 11 petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware. As stated in court filings, LSP owns and operates an electricity plant located in Batesville, Mississippi. Aside from its gas-fired electric generation facility, LSP's assets consist primarily of 58 acres of land in which it operates its facility. See Declaration of LSP's President in Support of First Day Motions (the "Declaration" or "Decl.").
USDC S.D. California, February 10, 2012
Pennsylvania Bar Institute Course
The healthcare industry was ailing in 2011. There were 88 publicly traded companies that filed for Chapter 11 relief in 2011, and of that amount, approximately 11 companies were in the healthcare industry. The healthcare industry led the group, with telecommunications and energy tied for second place (nine filings in each industry). The healthcare industry has faced many challenges over the years. For starters, hospitals are not always paid for their services.