WE WON. WE MADE NEW LAW.

In the Chapter 11 case of Beaulieu Group, LLC (carpet industry in Dalton, Georgia) in the U.S. Bankruptcy Court for the Northern District of Georgia, we defended Auriga Polymers Inc. (a subsidiary of Indorama Ventures) in a preference claim filed by the Beaulieu Liquidating Trustee. 

What does this mean for you? Should you stop providing goods and services? Should you call and ask for the money?

If the customer owes you a substantial amount for your services and has told you that they have no assets, what do you do?

Following a July 6, 2022 memorandum opinion from the United States Bankruptcy Court for the District of Delaware, lenders and noteholders seeking to preserve the priority of their liens must make any desired subordination protections explicit in their security documents. Judge Craig T. Goldblatt’s decision in In re TPC Group Inc. upholds a prepetition “uptier” transaction and narrows the issues before the Bankruptcy Court regarding TPC Group Inc.’s desired entry into a debtor-in-possession loan with an ad hoc group of noteholders over the dissent of minority holders.

As a result of recent high profile Chapter 11 cases, such as Purdue Pharma and Johnson & Johnson, there has been great Congressional and media attention to controversial Chapter 11 practices. These include debtors’ forum and judge shopping, nonconsensual third-party releases of nondebtors in the Plan of Reorganization, and the use of divisional mergers to isolate liabilities into special purpose entities.

In 2021, to address these concerns, two bills were introduced in the U.S. Senate and House of Representatives:

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.

According to the American Bankruptcy Institute, total commercial Chapter 11 filings in July 2021 decreased 62 percent from the previous year. Commercial Chapter 11 filings totaled 244 in July 2021, down from the July 2020 total of 644. Lender forbearance, continued low interest rates, and massive financial intervention by the U.S. and economies world-wide have allowed financially distressed companies to survive during the pandemic. As relief programs recede, however, we will likely see an increase in Chapter 11 filings.