The judicial power of the United States is vested in courts created under Article III of the Constitution. However, Congress created the current bankruptcy court system over 40 years ago pursuant to Article I of the Constitution rather than under Article III.
Southeastern Grocers (operator of the Winn-Dixie, Bi Lo and Harvey’s supermarket chains) recently completed a successful restructuring of its balance sheet through a “prepackaged” chapter 11 case in the District of Delaware. As part of the deal with the holders of its unsecured bonds, the company agreed that under the plan of reorganization it would pay in cash the fees and expenses of the trustee for the indenture under which the unsecured bonds were issued.
The Supreme Court’s recent decision in Merit Management Group, LP v. FTI Consulting, Inc. has appropriately drawn significant attention.
A recent Federal Court decision puts administrators on notice that they must carefully consider the consequences of dealing with other people’s assets.
The decision of Justice Perram in White, in the matter of Mossgreen Pty Ltd (Administrators Appointed) [2018] FCA 471, highlights the care that administrators must take when administering property outside the scope of their authority.
In Mossgreen, administrators were appointed to a company that conducted a business that ran an auction house and gallery.
The Victorian Court of Appeal decides that the Corporations Act priority regime does apply to trading trusts.
The law is now clear. Or is it?
For the last two years and six days, insolvency practitioners and other stakeholders involved in the liquidation of trading trusts have been frustrated by what should be a very straightforward question.
If the company in liquidation carries on business through a trust structure, as many do, what is the order of priorities that the liquidator must apply when making distributions to creditors?
The Supreme Court recently heard arguments in a patent dispute case, Oil States Energy Services, LLC v. Greene’s Energy Group, LLC. Although the case has nothing to do with bankruptcy law, its outcome could have a substantial impact on bankruptcy practice and litigation.
The Supreme Court two years ago ruled in Baker Botts v. Asarco that bankruptcy professionals entitled to compensation from a debtor’s bankruptcy estate had no statutory right to be compensated for time spent defending against objections to their fee applications.
The Supreme Court recently granted certiorari in PEM Entities LLC v. Levin, in which it will decide whether federal or a state law should apply when a debt claim held by a debtor’s insider is sought to be recharacterized in bankruptcy as a capital contribution and treated as equity. The case raises important questions about the extent to which the commencement of a proceeding under the U.S.
In Millenium Lab Holdings, Delaware District Court Judge Leonard Stark, on an appeal from a bankruptcy court order confirming a plan of reorganization, recently upheld a challenge to the bankruptcy court’s constitutional authority to release claims against non-debtor third parties under the plan.
It is common practice for company contracts to contain clauses, known as “ipso facto” clauses, which terminate or amend the contract (e.g. by accelerating payments) merely because a company has entered into a formal insolvency process.