On May 1, 2016, BIND Therapeutics, Inc., and affiliated companies (“Debtors” or “BIND”) voluntarily filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code.

The filing comes days after the Cambridge, Mass., company received a notice of default from lender Hercules Technology III LP, which demanded immediate payment of the $14.5 million the lender says it is owed under the loan. The Company is backed by Koch Industry Inc.’s David Koch.

– But they weren’t as oppressive as my subject line may imply.

In a 13 page decision, released April 22, 2016, Judge Gross of the Delaware Bankruptcy Court granted a motion to dismiss an adversary proceeding and sanctioned the Plaintiff – disallowing any further litigation against the defendants in the Bankruptcy Court. Judge Gross’ opinion is available here (the “Opinion”).

Recently in the Abengoa SA bankruptcy proceeding (click here to review prior post), the United States Bankruptcy Court for the District of Delaware entered an order permitting Debtors to reject certain nonresidential real property leases (the “Rejection Order”).

Under the Bankruptcy Ordinance (Cap. 6) (“BO”), a person who has been adjudged bankrupt will be entitled to be discharged from bankruptcy four years after the making of the bankruptcy order, unless it is a second bankruptcy or the period is extended by the Court. The maximum extension is an additional four year period.

Section 42 of the Bankruptcy Ordinance (Cap. 6) (“BO”) provides that where a person is adjudged bankrupt, any disposition of property made by that person from the date of presentation of the bankruptcy petition is void unless made with the consent of the Court or unless subsequently ratified by the Court. The purpose of this section is to prevent the improper dissipation of the bankrupt’s assets once a bankruptcy petition is filed and to protect the principle of pari passu distribution.

Section 30A(1) of the Bankruptcy Ordinance (Cap. 6) (the “BO”), provides that the bankruptcy period, for a person who has been adjudged bankrupt for the first time, runs for four years. However, section 30A(4) of the BO provides eight grounds upon which the Court, on the application of the trustee in bankruptcy or a creditor, can order the suspension of a bankruptcy period – in effect lengthening the period of bankruptcy.

A bankrupt can be required to pay a portion of his income earned during the bankruptcy to his or her trustees by way of a contribution to the bankrupt estate. Such payments can be fixed by the court pursuant to section 43E of the Bankruptcy Ordinance (Cap 6 of the Laws of Hong Kong) or agreed between the bankrupt and the trustees on an informal basis, and are calculated after assessing the bankrupt's reasonable expenses.

This is a case with respect to the interpretation of the words "the applicant's entitlement to severance payment" in section 16(2)(f)(i) of the Protection of Wages on Insolvency Ordinance (the "PWIO").

Under the PWIO, the applicant may apply for an ex-gratia payment from the Protection of Wages on insolvency Fund (the "Fund") as his former employer entered into voluntary liquidation.

The relevant sections of the PWIO are set out below:-

"15(1) ......an applicant to whom:-

In preparing a statement supporting the determination that recusal from a bankruptcy proceeding was unnecessary, U.S. Bankruptcy Court Judge Richard E. Fehling quoted Master Sergeant Georg Hans Shultz from the television sitcom Hogan’s Heroes: “I KNOW NOTHING!  NOTHING!”

Criminal defendants facing onerous restitution obligations as part of their sentence might contemplate a bankruptcy filing, in the hope of staving off the restitution obligation. In a case of first impression, the Second Circuit recently considered whether the Bankruptcy Code’s automatic stay provision halts a defendant’s obligation to pay restitution and firmly closed the door on that potential gambit.