On March 14, 2022, the United States Court of Appeals for the Fifth Circuit (the “Fifth Circuit”) revisited the issue of the rejection of filed-rate contracts in bankruptcy where such contracts are governed by the Federal Energy Regulatory Commission (“FERC”). The ruling marks the first time the Fifth Circuit has addressed this issue since its 2004 decision in In re Mirant Corp.¹ In Federal Energy Regulatory Commission v.

For a company with robust data protection and recovery practices, a ransomware attack may cause a few extra headaches, but it won’t wipe the company out. Companies without those protections in place, however, risk allowing ransomware to bankrupt their entire enterprise.

A recent order from the United States Bankruptcy Court for the Southern District of Texas (the “Court”) allowed a debtor to reopen a completed auction based on a significantly more attractive, but untimely, bid. The late bid was approximately three times the cash consideration of the previously declared winning bid, and also provided for the additional containment of potential environmental risks. The decision is being appealed to the United States District Court for the Southern District of Texas (the “District Court”).

Judge Craig Whitley’s recent transfer of the LTL Management case will bring a high-profile "Texas Two-Step" chapter 11 bankruptcy to New Jersey, and it may open a new chapter in how courts approach the novel transaction designed to isolate and address certain mass-tort liabilities.

In a decision that will likely impact bankruptcy proceedings around the country, the Supreme Court recently denied the petition for writ of certiorari of David Hargreaves, which challenged the equitable mootness doctrine.¹ As a result, the concept of equitable mootness remains anything but moot.

On March 19, 2021, the Court of Appeals for the Third Circuit issued its decision in In re Orexigen Therapeutics, Inc., 2021 WL 1046485 (3rd Cir. Mar. 19, 2021), affirming lower courts’ decisions rejecting “triangular setoff” agreements as a proper basis for the application of setoff rights under section 553 of the Bankruptcy Code.

n December 21, 2020, Congress passed the Consolidated Appropriations Act of 2021 (the Act), which was just signed by President Donald Trump. The Act makes certain amendments to the United States Bankruptcy Code (the Bankruptcy Code) relating to small business bankruptcies commenced under Subchapter V of Chapter 11, as well as to individual bankruptcies under Chapters 7, 11, 12, and 13 of the Bankruptcy Code. This article highlights those changes to the Bankruptcy Code that small businesses should consider utilizing in weighing the benefits and potential costs of filing for bankruptcy.

The Federal bank regulators which supervise banks have made a statement encouraging workouts necessitated by the coronavirus. Loans which would otherwise be classified as TDRs (Troubled Loan Restructurings) will not have to be classified as such under certain conditions. For example, if the workout was necessitated by the pandemic and if the loan was otherwise in good standing as of December 31, 2019. The government’s intent is clear: Everyone gains more by a workout or restructuring than by liquidation or litigation. Value is often severely diminished in bankruptcy or in a liquidation.

Shortly after the passage of a bill injecting an additional $310 billion into the Small Business Administration’s Paycheck Protection Program, the SBA has issued another supplemental Interim Final Rule (IFR) providing new guidance on several issues, including eligibility for hedge funds, private equity firms and portfolio companies, and has also answered questions about businesses in bankruptcy proceedings.

Faced with constantly evolving circumstances in these challenging times, officers and directors should not lose sight of what is arguably their most important corporate role–that is, as a fiduciary. The question, particularly as a corporation’s financial situation changes and restructuring is being considered, is: Who is that fiduciary duty owed to? Unfortunately, the answer depends on whether the corporation is insolvent or near insolvent, which is why being vigilant now will help avoid scrutiny by creditors later.