Liability management exercises (“LMEs”) are increasing in the bond and capital market and are often used in relatively benign situations. They are certainly not always a precursor to a full-scale restructuring or insolvency.
Prior to the recent collapse in oil values, prices existed at over $100 a barrel for over three years. It made the economics of oil exploration, production and sale comparatively straightforward, but embedded costs into the industry.
On May 16, 2016, the United States Supreme Court decided the term “actual fraud” in Bankruptcy Code § 523(a)(2)(A) encompasses forms of fraud, like fraudulent conveyance schemes, that can be effected without a false representation by a debtor. Importantly, the Husky International Electronics, Inc. v. Ritz, No. 15-145, 2016 WL 2842452 (U.S. May 16, 2016) opinion clears up a split among the lower courts on the question of whether the phrase “actual fraud” requires a false representation to be made to a creditor.
For attorneys, the phrase “Don’t be a jerk” starts any class on professionalism or ethics. Not taking another attorney’s phone calls and failing to return those calls certainly qualifies as “being a jerk”. It is frankly, quite rude. But while being rude can be aggravating to opposing counsel, is it sanctionable? A Puerto Rican lawyer and her firm found out to the tune of $14,270.60 that it is.
Legal & Regulatory
BRRD: FCA publishes modification by consent for Article 55 rules
Second Circuit holds that Bankruptcy Code preempts creditors’ state law constructive fraud claims.
Your business receives payment for goods or services that your business provided to a customer (“XYZ Inc.”). Your business is paid from the customer’s corporate account. You know that the payment came from XYZ Inc.’s corporate account because the check or credit card used for payment is in the name of XYZ Inc. However, three years later, you receive a letter from the “trustee” of XYZ Inc., now a debtor in bankruptcy, demanding payment of the money your business received for having provided goods or services to XYZ Inc.
Before a losing party forges ahead with an appeal of an order or judgment from a bankruptcy court located in the Eleventh Circuit (or any other circuit for that matter), such party would do well to consider whether it has standing to prosecute an appeal in the first instance.
When seeking approval of a settlement in a bankruptcy case, the usual vehicle for approval is the filing of a motion pursuant to Bankruptcy Rule 9019 and a subsequent hearing. While Rule 9019 and case law require certain factual and legal thresholds be established to gain the approval, the Rule does not specifically require an evidentiary hearing on motions to approve settlements.