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To Retain (Under Section 327(a) or 363(b) of the Bankruptcy Code) or Not to Retain? Retention of Liquidation Consultants in Bankruptcy Cases

In a recent opinion – In re Heritage Home Group LLC, et al., Case No. 18-11736 (KG), 2018 WL 4684802 (Bankr. D. Del. Sept. 27, 2018) – the Delaware Bankruptcy Court addressed the longstanding issue of which professional persons must be retained under section 327(a) of the Bankruptcy Code.

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Liquidation, US District Court for District of Delaware
Absolute(ly) No - A Reminder That When It Comes to Reorganization, Equity Comes Last

A fundamental tenet of chapter 11 bankruptcies is the absolute priority rule. Initially a judge-created doctrine, the absolute priority rule was partially codified in section 1129(b)(2)(B)(ii) of the Bankruptcy Code. Under section 1129, plans must be “fair and equitable” in order to be confirmed.

USA, North Carolina, Banking, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Bankruptcy, Debtor
Fees, Fees, Fees: SDNY Bankruptcy Court Questions the Ongoing Validity of the “Blackstone Protocol” for Investment Banker Fees in Chapter 11 Cases

Background: Professionals’ Fees in Chapter 11 cases

USA, Banking, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Title 11 of the US Code, United States bankruptcy court, US District Court for the Southern District of New York
Forgiveness of distressed debt in Europe

Tax treatment in the hands of the creditor

Netherlands, Insolvency & Restructuring, Tax, Bird & Bird LLP, Tax exemption, Bankruptcy, Shareholder, Debtor, Dividends, Waiver, Accounts receivable, Taxable income, Debt, Tax deduction, Holding company, Distressed securities
Forgiveness of distressed debt in Europe

Tax treatment in the hands of the creditor

If a creditor waives an intra-group receivable, this leads to an accounting loss in the amount of the receivable. Such loss, however, is not automatically tax-deductible in the hands of the creditor.

Germany, Insolvency & Restructuring, Tax, Bird & Bird LLP, Share (finance), Shareholder, Debtor, Security (finance), Waiver, Accounts receivable, Taxable income, Debt, Liability (financial accounting), Tax deduction, Fair market value, Distressed securities, Bénéfice, GAAP