Fulltext Search

On April 16, 2012, the Supreme Court of the State of New York, Nassau County, entered an Order of Liquidation and Approval of the ELNY Restructuring Agreement (Order) and accompanying memorandum decision. The Order was entered over the objections of a number of ELNY payees, and followed an 11 day hearing that took place in March 2012.

Many experienced business people are now familiar with the process by which their valid and successful debt collection efforts result in liability under the preference provisions of the Bankruptcy Code.

New amendments to Federal Rule of Bankruptcy Procedure 2019 were recently adopted in an attempt to clarify requirements surrounding file 2019 statements in Chapter 11 bankruptcy cases.

Prior to the amendments, which were adopted Dec. 1, 2011, Rule 2019 was often applied in an inconsistent haphazard manner resulting in a great deal of uncertainty regarding who was required to file the statement and under what circumstances that statement was required to be filed.  

The Original Rule 2019

If you are a creditor of a Delaware limited liability company and wish to pursue derivative claims on behalf of an insolvent company against the company’s present or former managers based on breaches of fiduciary duties, you may be out of luck. The Delaware Supreme Court recently decided in CML V LLC v. Bax, 2011 Del. LEXIS 480 (Sept. 2, 2011), that creditors’ rights against limited liability companies differ from those against corporations.

Recently secured parties, including some indenture trustees, have found the priority, scope, validity and enforceability of seemingly properly perfected security interests in Federal Communications Commission (“FCC”) licenses, authorizations and permits, and any proceeds or value derived therefrom, challenged by creditors in bankruptcy proceedings.

Imagine a scenario in which you have a long standing relationship with an important customer and you learn that this customer is running into financial difficulties. In the current economic cycle, this is probably not a hypothetical, but, rather, an everyday reality. During the course of the relationship, this important customer has from time to time fallen behind in paying invoices and has even reached or exceeded the credit limits your company has imposed on this customer.

A recent decision by the U.S. District Court for the
Southern District of New York concluded that a landlord
who obtains a judgment of possession and warrant of
eviction prepetition, yet is stayed from executing on the
warrant due to the debtor’s bankruptcy filing, may not be
entitled to post-petition rent as an administrative expense.
In In re Association of Graphic Communications, Inc., No. 07-
10278 (Bankr. S.D.N.Y. July 13, 2010), the court decided
that, under New York law, the prepetition warrant of