In this series, we look at how various payment rights are treated in bankruptcy. A summary like this could not possibly address every right that might arise in any given bankruptcy case. We have omitted several of the Bankruptcy Code’s more esoteric legal protections and exceptions that arise in specific kinds of bankruptcy cases. When bankruptcy strikes, creditors should always consult a bankruptcy lawyer to understand what actions they need to take to preserve their rights and maximize their recovery.

The Basic Concept of a “Claim”

In this series, we look at how various payment rights are treated in bankruptcy. A summary like this could not possibly address every right that might arise in any given bankruptcy case. We have omitted several of the Bankruptcy Code’s more esoteric legal protections and exceptions that arise in specific kinds of bankruptcy cases. When bankruptcy strikes, creditors should always consult a bankruptcy lawyer to understand what actions they need to take to preserve their rights and maximize their recovery.

The Basic Concept of a “Claim”

In this series, we look at how various payment rights are treated in bankruptcy. A summary like this could not possibly address every right that might arise in any given bankruptcy case. We have omitted several of the Bankruptcy Code’s more esoteric legal protections and exceptions that arise in specific kinds of bankruptcy cases. When bankruptcy strikes, creditors should always consult a bankruptcy lawyer to understand what actions they need to take to preserve their rights and maximize their recovery.

The Basic Concept of a “Claim”

Even in the halcyon days pre-coronavirus, a typical small business could not operate for more than two weeks without incoming revenue. In a matter of months, social distancing and mass unemployment having dramatically reduced consumer spending and companies are surviving by cutting energy usage, adjusting inventory purchases, and drawing on Paycheck Protection Program loans to backstop employee wages. Rent, however, is one expense that remains immutable.

The Situation: In the past few weeks, due to the severe impact of the COVID-19 crisis on non-essential businesses forced to close and terminate employees after filing for chapter 11 protection, bankruptcy courts have been confronted with requests by debtors to temporarily suspend their bankruptcy cases using the courts' equitable powers and a seldom-used provision of the Bankruptcy Code: 11 U.S.C. § 305(a).

In This Issue:

U.S. Supreme Court: Creditors May Immediately Appeal Denials of Automatic-Stay Relief

In McKillen v. Wallace (In re Irish Bank Resolution Corp. Ltd.), 2019 WL 4740249 (D. Del. Sept. 27, 2019), the U.S. District Court for the District of Delaware had an opportunity to consider, as an apparent matter of first impression, whether the U.S. common law "Barton Doctrine" applies extraterritorially. One of the issues considered by the district court on appeal was whether parties attempting to sue a foreign representative in a chapter 15 case must first obtain permission to sue from the foreign court that appointed the foreign representative.

In In re O’Reilly, 598 B.R. 784 (Bankr. W.D. Pa. 2019), the U.S. Bankruptcy Court for the Western District of Pennsylvania denied the petition of a foreign bankruptcy trustee for recognition under chapter 15 of the Bankruptcy Code of a debtor’s Bahamian bankruptcy case. Although the Bahamian bankruptcy was otherwise eligible for chapter 15 recognition, the U.S.

In response to the Federal Energy Regulatory Commission (“FERC”), the U.S. Bankruptcy Court for the Northern District of California held that the rejection of wholesale power purchase agreements “is solely within the power of the bankruptcy court, a core matter exclusively this court’s responsibility.” [1]

For more than a century, courts in England and Wales have refused to recognize or enforce foreign court judgments or proceedings that discharge or compromise debts governed by English law. In accordance with a rule (the "Gibbs Rule") stated in an 1890 decision by the English Court of Appeal, creditors holding debt governed by English law may still sue to recover the full amount of their debts in England even if such debts have been discharged or modified in connection with a non-U.K.