Introduction
Definition of production unit (UPA in its Spanish acronym)
UPA means a "set of organised means necessary for the exercise of an essential or ancillary business activity" (sec. 200.2 TR LC). If there is one or more UPAs of goods or services within the bankruptcy assets, these shall be detailed in an annex to the inventory, with a reference to the goods and services of the bankruptcy assets comprised thereunder (sec. 200.1 TR LC).
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.
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.
Background: Professionals’ Fees in Chapter 11 cases