Siegel v. Fitzgerald, 142 S. Ct. 1770 (June 6, 2022)

Much discussion has been had recently about the fact that cryptocurrencies (tokens and coins) do not fit neatly into a generally accepted financial asset classification. The value of most cryptocurrencies is not pegged to any tangible commodity or fiat currency.

In bankruptcy parlance, the lookback period does not look good for the crypto industry. In the last 90 days, the cryptocurrency markets have suffered huge losses, and in the last 14 days, two major players have sought bankruptcy protection. During the prior 365 days, nearly three trillion dollars of value has been stripped from the digital wallets of cryptocurrency investors, and the industry has been forced to eliminate thousands of jobs.

News outlets and industry publications have been publishing information about recent “crypto winter” bankruptcies. In order to understand the impact of these bankruptcies as well as how they may impact your investments, it is important to understand what is currently known about these recent filings.

Three Arrows Capital Liquidation and Bankruptcy

The Fifth Circuit recently weighed in on the hotly contested issue of whether the Federal Energy and Regulatory Commission (FERC) or the bankruptcy court has controlling jurisdiction when it comes to the question of a bankruptcy debtor’s ability to reject contracts regulated by FERC. FERC-regulated contracts include electricity power purchase contracts, as well as transportation services agreements involving oil and gas.

In the bankruptcy world, not all claims are created equal. Rather, certain special categories of claims have priority status and are not only paid ahead of other claims, but are also often paid in full. One such category of claims is found in Bankruptcy Code § 503(b)(9), which grants priority claim status for goods which were sold in the ordinary course of business and received by a debtor within the 20-day window leading up to the bankruptcy filing. The code section is very clear, however.

Many small businesses are structured as pass-through entities for federal income tax purposes.[1] Well known examples include partnerships, limited liability companies, and corporations that elect “S Corporation” status under 26 U.S.C. Section 1362.[2]

The COVID-19 pandemic has forced big-name brands to pursue unique strategies to secure fiscal relief.

Since the early days of the COVID-19 crisis in the U.S., it has been a recurring theme to turn on the news and see that yet another big-name retailer is rumored to be on the brink of filing, or has already filed, for bankruptcy.

Two recent bankruptcy court cases remind counsel of the great importance of knowing the proclivities of the presiding panel of judges who will hear your client’s case. Experienced practitioners know the law and the best advocates also know the assigned judges. Both cases discussed below illustrate the importance, at least in bankruptcy practice, of arguing the law in a fashion that addresses the court’s sense of what is fair and proper under the case’s unique circumstances.

Voluntary Retirement Plan Contributions Are Required for Maintenance or Support?