Over the past year, the Covid-19 pandemic upended many industries. While the construction industry has largely been able to operate throughout the pandemic, albeit with increased and ever-changing restrictions on jobsites, one consequence of these disruptions may be an increase in construction-related bankruptcy filings. Already in 2021, there have been over 70 construction-related bankruptcy filings across the country. For many property owners and real estate developers, these filings create a nightmare scenario where work may slow or even stop entirely.

When being sued, corporate and individual defendants should always confirm that the plaintiff has not been previously discharged in bankruptcy and failed to disclose the claim in the proceeding as an asset of the bankruptcy estate. In Guay v. Burack, 677 F.3d 10 (1st Cir. 2012), the plaintiff brought numerous claims against various governmental entities, governmental officials and a police officer.

In general, a company has two bankruptcy alternatives: liquidation under Chapter 7 and reorganization under Chapter 11.

Under Chapter 7, upon the filing of a bankruptcy petition, a trustee is appointed to gather and sell all of the debtor’s assets as quickly as possible. Once the trustee liquidates all of the assets, it must pay creditors in accordance with the priority scheme mandated by the Bankruptcy Code:

In today’s economy, we continue to see bankruptcies occurring in the construction sector. An owner, contractor, or subcontractor in financial distress can easily delay a project — or worse, jeopardize the project in its entirety. Contractors need to understand their rights in order to minimize their exposure in bankruptcy-related situations.

Protecting Contractors — Frequently Asked Questions

In recent years, several foreign companies have used the English law scheme of arrangement as a flexible restructuring method to compromise creditor claims.  The decision of the High Court in the latest of these cases, that of the German company Rodenstock GmbH, clarifies that an English court will accept jurisdiction where the only connection to England is that the company’s finance documents were governed by English law.

One of the many issues which arose from the collapse of Lehman Brothers was whether “flip provisions”, which reverse a swap counterparty’s priority in the order of payment on insolvency, were invalid on the basis that they contravened the anti-deprivation principle.  This is a long-established common law principle which seeks to prevent an insolvent party from arranging its affairs to frustrate the legitimate claims of creditors.

Masuda, Funai, Eifert & Mitchell routinely represents creditors in bankruptcy proceedings in order to protect their contractual and legal interests and rights to payment. The following is a list of some recent larger U.S. bankruptcy filings in various industries. To the extent you are a creditor to any of these debtors, or other entities which may have filed for bankruptcy protection, you as a creditor are entitled to certain protections under the Bankruptcy Code.

AUTOMOTIVE

The following is a list of some recent larger U.S. bankruptcy filings in various industries. To the extent you are a creditor to any of these debtors, or other entities which may have filed for bankruptcy protection, you as a creditor are entitled to certain protections under the Bankruptcy Code.  

DINING  

Giordano’s Enterprises Inc. filed for Chapter 11 bankruptcy along with 32 of its affiliates.  

Garden Operations Realty LP, the parent of New York bagel manufacturer H&H Bagels, has filed for Chapter 11 protection.  

The following is a list of some recent larger U.S. bankruptcy filings in various industries. To the extent you are a creditor to any of these debtors, or other entities which may have filed for bankruptcy protection, you as a creditor are entitled to certain protections under the Bankruptcy Code.

ADVERTISING

Advertising firm Vertis Holdings Inc. has landed in bankruptcy court for a second time, filing a prepackaged Chapter 11.

PUBLISHING

The following is a list of some recent larger U.S. bankruptcy filings in various industries. To the extent you are a creditor to any of these debtors, or other entities which may have filed for bankruptcy protection, you as a creditor are entitled to certain protections under the Bankruptcy Code.

HEATING & AIR CONDITIONING

Wolverine Tube Inc. and several affiliates filed prearranged Chapter 11 petitions after reaching a deal with noteholders.

FINANCIAL

Ambac Financial Group Inc. filed for Chapter 11 protection.