What does it mean to “cure” a default in the context of a plan of reorganization? This question arises by virtue of section 1123(a)(5)(G) of the Bankruptcy Code, which requires that a plan provide adequate means for the plan’s implementation, including the “curing or waiving of any default.” On November 4, 2016, the Ninth Circuit Court of Appeals defined what it means to “cure” by holding that a debtor can only cure a contractual default under a plan of reorganization by complying with contractual post-default interest rate provisions.
NJOY, Inc., an e-cigarette and vaping company headquartered in Scottsdale, Arizona, has filed for chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware (Case No. 16-12076).
Noble Environmental Power, LLC, and several of its affiliates filed for Chapter 11 protection in the Bankruptcy Court for the District of Delaware (Lead Case No. 16-12055). Noble, a renewable energy company that owns and operates wind generation assets in New York and Texas, has its principal place of business in Centerbrook, Connecticut. According to the Debtor’s first day affidavit, downward trends in energy prices have made its debt obligations untenable, leading to the commencement of this case.
When should debt be recharacterized as equity? The answer to this question will have an enormous impact upon expected recovery in bankruptcy since equity does not begin to get paid until all prior classes of claims are paid in full. In a recent unpublished opinion, the Fourth Circuit Court of Appeals provided some guidance on when and in what circumstances recharacterization is appropriate. The Court’s decision also serves as warning to purchasers of debt that they may not be able to hide behind the original debt transaction in a recharacterization fight.
The Jevic Holding Corp. bankruptcy case is proving to be precedent setting. In a prior post, we examined how the court had greatly increased the evidentiary burden on a party seeking to hold one company liable for the debts of another company under a “single employer” theory. That ruling was seen as a boon for private equity firms who were oftentimes the target of Chapter 11 creditor
On March 2, 2016, Sports Authority Holdings, Inc. and six of its affiliates filed chapter 11 petitions before the United States Bankruptcy Court for the District of Delaware (lead case 16-10527). The cases have been assigned to the Honorable Mary F.
When can a bank be at risk of unknowingly receiving a fraudulent transfer? How much information does a bank need to have before it is on “inquiry notice”? A recent decision from the Seventh Circuit Court of Appeals highlights the risks that a bank takes when it ignores red flags and fails to investigate. This decision should be required reading for all lenders since, in the matter before the Seventh Circuit, the banks’ failure to investigate their borrower’s questionable activity caused the banks to lose their security and have their secured loans reduced to unsecured claims.
Did Trump win again? Yes, but this time it was not “The Donald” but was instead the casino operator Trump Entertainment Resorts, Inc.
Did Trump win again? Yes, but this time it was not “The Donald” but was instead the casino-operator Trump Entertainment Resorts, Inc. (“Trump Entertainment”).
Recent changes to the Federal Rules of Civil Procedure will significantly alter the discovery proceedings in bankruptcy proceedings, particularly in adversary proceedings. See Fed. R. Bankr. P. Part VII (applying FRCP to adversary proceedings) and Rule 9014(c) (applying FRCP to most contested matters). While not intended to be a comprehensive analysis, below are some key considerations for bankruptcy practitioners navigating the amended rules.