The bankruptcy court presiding over the FTX Trading bankruptcy last month issued a memorandum opinion addressing valuation of cryptocurrency-based claims and how to “calculate a reasonable discount to be applied to the Petition Date market price” for certain cryptocurrency tokens.

File your proof of claim before the bar date. That’s a principle every creditor in a bankruptcy case should adhere by. But on June 7, 2024, the United States Bankruptcy Court for the Southern District of New York may have increased the degree of diligence parties need to conduct to determine whether they are a potential creditor in a case and therefore required to file a proof of claim.

When a liquidating debtor seeks to assume a lease, one of the lessor’s immediate questions is who will be the assignee. But what happens when a liquidating debtor seeks to assume a lease and waits up to two years thereafter to determine who the assignee will be? Although peculiar, the analysis of whether to grant the assumption rests on evaluating the three basic requirements under section 365 of the Bankruptcy Code.

As seen in the recent proliferation of bankruptcy cases seeking a structured dismissal or conversion after a successful sale, debtors constantly seek creative and efficient ways to wind up a case, including through a traditional plan of liquidation. Yet, as discussed below, debtors must ensure that any proposed voting procedures for a plan comply with section 1126 of the Bankruptcy Code, or are at least supported by, or supportable with, prior precedent.

A common defense to a fraudulent transfer claim in bankruptcy concerning a securities transaction is the “safe harbor” defense under section 546(e) of the Bankruptcy Code. In a unique twist, a post-confirmation trust in Delaware recently argued that the safe harbor defense should not be available if the underlying transaction was illegal under the law where the debtor/transferor was incorporated.

A consensual resolution among all stakeholders is an important goal of any bankruptcy proceeding. But how can parties reach a consensual deal if financing is drying up quickly and the prospect of confirming a plan is grim? That was the issue facing the Rockport debtors (the “Debtors”) in their Delaware bankruptcy cases styled In re The RP Co. Liquidating, LLC. In this case, the Debtors filed a motion asking the bankruptcy court to approve a global settlement (the “Settlement”) with all parties-in-interest—except the Office of the United States Trustee (the “U.S. Trustee”).

Federal appellate courts have traditionally applied a "person aggrieved" standard to determine whether a party has standing to appeal a bankruptcy court order or judgment. However, this standard, which requires a direct, adverse, and financial impact on a potential appellant, is derived from a precursor to the Bankruptcy Code and does not appear in the existing statute.

The court-fashioned doctrine of "equitable mootness" has frequently been applied to bar appeals of bankruptcy court orders under circumstances where reversal or modification of an order could jeopardize, for example, the implementation of a negotiated chapter 11 plan or related agreements and upset the expectations of third parties who have relied on the order.

On June 6, 2023, the U.S. Bankruptcy Court for the Southern District of Texas confirmed the chapter 11 plan of bedding manufacturer Serta Simmons Bedding, LLC and its affiliates (collectively, "Serta"). In confirming Serta's plan, the court held that a 2020 "uptier," or "position enhancement," transaction (the "2020 Transaction") whereby Serta issued new debt secured by a priming lien on its assets and purchased its existing debt from participating lenders at a discount with a portion of the proceeds did not violate the terms of Serta's 2016 credit agreement.

Section 546(e) of the Bankruptcy Code's "safe harbor" preventing avoidance in bankruptcy of certain securities, commodity, or forward-contract payments has long been a magnet for controversy. Several noteworthy court rulings have been issued in bankruptcy cases addressing the application of the provision, including application to financial institutions, its preemptive scope, and its application to non-publicly traded securities.