One year ago, we wrote that, unlike in 2019, when the large business bankruptcy landscape was generally shaped by economic, market, and leverage factors, the COVID-19 pandemic dominated the narrative in 2020. The pandemic may not have been responsible for every reversal of corporate fortune in 2020, but it weighed heavily on the scale, particularly for companies in the energy, retail, restaurant, entertainment, health care, travel, and hospitality industries.

In 2019, the U.S. Court of Appeals for the Second Circuit made headlines when it ruled that creditors' state law fraudulent transfer claims arising from the 2007 leveraged buyout ("LBO") of Tribune Co. ("Tribune") were preempted by the safe harbor for certain securities, commodity, or forward contract payments set forth in section 546(e) of the Bankruptcy Code. In that ruling, In re Tribune Co. Fraudulent Conveyance Litig., 946 F.3d 66 (2d Cir. 2019), cert. denied, 209 L. Ed. 2d 568 (U.S. Apr.

COVID-19 M&A Lessons

On April 29, 2021, the United States Court of Appeals for the Fourth Circuit issued its decision in Siegel v. Fitzgerald (In re Circuit City Stores, Inc.), Case No. 19-2240 (4th Cir. Apr. 29, 2021), upholding the constitutionality of a 2017 law that substantially increased the quarterly fees debtors are required to pay to the Office of the United States Trustee (the “US Trustee”) in chapter 11 bankruptcy cases.

On March 31, 2021, the United States Bankruptcy Court for the District of Nevada awarded attorney’s fees to a debtor under a Nevada fee-shifting statute for objecting to a time-barred proof of claim.¹ The opinion serves as a warning that filing a proof of claim for time-barred debt may carry consequences other than claim disallowance despite the Supreme Court’s recent holding in Midland Fu

Introduction
Business Bankruptcy Filings
Public Company Bankruptcies
Notable Bankruptcy Rulings
Legislative Developments

One year ago, we wrote that the large business bankruptcy landscape in 2019 was generally shaped by economic, market, and leverage factors, with notable exceptions for disastrous wildfires, liabilities arising from the opioid crisis, price-fixing fallout, and corporate restructuring shenanigans.

The year 2020 was a different story altogether. The headline was COVID-19.

Use, sale or lease of estate property outside ordinary course
Special rules for use of cash collateral
Jevic and distributions inconsistent with the Bankruptcy Code's priority scheme
Claar Cellars
The Bankruptcy Court's Ruling

The ability of a bankruptcy trustee or a chapter 11 debtor-in-possession ("DIP") to use "cash collateral" during the course of a bankruptcy case may be vital to the debtor's prospects for a successful reorganization. However, because of the unique nature of cash collateral, the Bankruptcy Code sets forth special rules that apply to the nonconsensual use of such collateral to protect the interests of the secured creditor involved. The U.S. Bankruptcy Court for the Eastern District of Washington examined these requirements in In re Claar Cellars, LLC, 2020 WL 1238924 (Bankr. E.D.

Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, qualifying businesses may seek up to $10 million under the Paycheck Protection Program (PPP) for funding payroll and business expenses. The US Small Business Administration (SBA) guarantees the loans, and the full principal amount of the loans and any accrued interest may qualify for loan forgiveness. For many businesses, PPP loans have served as a lifeline during the COVID-19 pandemic.