In bankruptcy cases, things often move more slowly than people would like or expect.  In addition to dealing with oversight by the bankruptcy court and the United States Trustee, a debtor typically spends significant time engaging with its lenders and secured creditors, committees of unsecured creditors, and any number of other key stakeholders.  Court approval is needed for most significant events in the case, for anything out of the ordinary course of business, and, at times, even for small matters.  Transparency, adequate notice and opportunity to object, and due process a

Last week, we discussed the complexities of metals exploration chapter 11 bankruptcy cases and addressed several of the notable issues that arise in those cases. The discussion of significant issues continues below.

On August 4, 2015, the Second Circuit weighed in for the first time on the circumstances in which the confirmation of a Chapter 11 plan could strip a secured creditor of its lien. In City of Concord, N.H. v.

Desperate times call for desperate measures.  It is not surprising then that a less than scrupulous debtor might be less than candid when disclosing assets and liabilities to a bankruptcy court.  But what happens if an individual debtor is discovered to have concealed assets – possibly fraudulently or in bad faith – and then seeks to exercise his or her statutory right under the Bankruptcy Code to exempt all or a portion of the discovered assets from being available to satisfy creditors?  Can a bankruptcy court in that circumstance look to the bad acts of the debtor as a basi

In Ritchie Capital Mgmt., LLC v. Stoebner, 779 F.3d 857 (8th Cir. 2015), the U.S. Court of Appeals for the Eighth Circuit affirmed a bankruptcy court’s decision that transfers of trademark patents were avoidable under section 548(a)(1)(A) of the Bankruptcy Code and Minnesota state law because they were made with the intent to defraud creditors.

It is already relatively settled that an insider who has personally guaranteed the debt of his or her company may face preference exposure to the extent the guaranteed debt is paid down during the one-year preference period applicable to insiders. Without doubt, such payments directly benefit the guarantor, whose obligation to the primary creditor is reduced dollar for dollar.

On December 19, 2014, the Governor of the State of Ohio signed into law legislation that clarifies and expands the scope of powers given to a receiver under Ohio’s receivership statutes (chapter 2735 of the Ohio Revised Code (“ORC”)).  Most significantly, effective March 23, 2015 (the effective date for all of the amendments), an Ohio receiver will have express statutory power to sell real and personal property free and clear of liens and will

The U.S. Supreme Court in RadLAX Gateway Hotel, LLC v. Amalgamated Bank, ___ S. Ct. ___, 2012 WL 1912197 (May 29, 2012), held that a debtor may not confirm a chapter 11 "cramdown" plan that provides for the sale of collateral free and clear of existing liens, but does not permit a secured creditor to credit-bid at the sale. The unanimous ruling written by Justice Scalia (with Justice Kennedy recused) resolved a split among the Third, Fifth, and Seventh Circuits.

On December 12, 2011, the Supreme Court granted a petition for certiorari in a case raising the question of whether a debtor's chapter 11 plan is confirmable when it proposes an auction sale of a secured creditor's assets free and clear of liens without permitting that creditor to "credit bid" its claims but instead provides the creditor with the "indubitable equivalent" of its secured claim. RadLAX Gateway Hotel, LLC v. Amalgamated Bank, No. 11-166 (cert. granted Dec. 12, 2011).

Earlier this year, the United States Court of Appeals for the Eleventh Circuit decided in In re Lett that objections to a bankruptcy court’s approval of a cram-down chapter 11 plan on the basis of noncompliance with the “absolute priority rule” may be raised for the first time on appeal. The Eleventh Circuit ruled that “[a] bankruptcy court has an independent obligation to ensure that a proposed plan complies with [the] absolute priority rule before ‘cramming’ that plan down upon dissenting creditor classes,” whether or not stakeholders “formally” object on that basis.