In Short

The Situation: When determining and quantifying unfair preference claims in Australia, does the Corporations Act permit liquidators to value transactions forming part of a single "continuous business relationship" (such as a running account) from the point of peak indebtedness, even if doing so disregards earlier transactions that might act to reduce the value of the claim against the creditor?

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

During this time of economic upheaval amidst the COVID-19 pandemic, many corporate borrowers are faced with the inability to service debt obligations, and creditors may seek to hold corporate officers and directors accountable as a result. In these uncertain times, it is wise to review the fiduciary duties of corporate directors and officers and the effects of financial distress on such duties.[1] The following Q&A provides guidance on this issue from a Delaware law perspective, as Delaware is the most commonly cited jurisdiction for corporate governance.

For months, landlords and tenants impacted by the COVID-19 pandemic have wondered whether force majeure clauses in leases would excuse a tenant's non-payment of rent. On June 3, 2020, a Bankruptcy Court for the Northern District of Illinois offered us an early look into how courts might interpret such clauses in the midst of the current crisis. In In re Hitz Restaurant Group, No. 20-B05012, 2020 WL 2924523 (Bankr. N.D. Ill. June 3, 2020), the Bankruptcy Court ruled that Executive Order 2020-7, the Stay-at-Home Order (the "Order") enacted by Illinois Governor, J.B.

The impact of COVID-19 is yet to be fully realized, and many companies are yet to consider restructuring as a means to survive the pandemic, but all companies and all creditors can benefit now from learning how employee matters are treated in a bankruptcy proceeding under chapter 11 of the U.S. Bankruptcy Code (as amended, the Bankruptcy Code). This blog provides a high-level overview of some of the most material matters affecting an employee workforce in the context of a chapter 11 restructuring.

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.

Coronavirus Aid, Relief, and Economic Security (CARES) Act

The U.S. Supreme Court recently handed down three rulings potentially impacting bankruptcy cases.

Nunc Pro TuncRelief

In Roman Catholic Archdiocese of San Juan v. Acevedo Feliciano, No. 18-921, 2020 WL 871715 (U.S. Feb. 24, 2020), the Court circumscribed the use of nunc pro tunc ("now for then") orders that make relief ordered by a court apply retroactively to an earlier point in time.

A company or group's financial distress causes significant turmoil for its owners, directors, managers, employees and often its suppliers and other creditors. For directors in particular, there are significant responsibilities and potential personal liabilities associated with the management of a company where its business is in financial distress.

Recent weeks have witnessed seismic shifts in the oil and gas industry because of crashing oil prices, demand destruction associated with the COVID-19 pandemic, and crude oil storage reaching record capacity levels. Upstream producers are especially vulnerable to these market pressures and have begun shutting in wells, asserting force majeure, and cutting costs. As counterparties to distressed producers, midstream players face new challenges in navigating contractual relationships and mitigating risk.