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Tenth Circuit BAP Holds that Section 541 of the Bankruptcy Code Doesn’t Invalidate Transfer Restrictions in LLC Operating Agreements

In a recent decision by the Tenth Circuit Bankruptcy Appellate Panel, the court held that a chapter 7 trustee could not sell an LLC membership interest pursuant to section 363 of the Bankruptcy Code because of a transfer restriction within the LLC operating agreement. Malloy v. Trak-1 Technology Inc.(In re Kramer), No. 21-005, 2022 WL 17176411 (B.A.P. 10th Cir. Nov. 23, 2022).

USA, Insolvency & Restructuring, Litigation, Nelson Mullins Riley & Scarborough LLP, US Congress
The Not-So-Automatic Stay for Foreign Assets and Creditors

When a debtor files for bankruptcy, it’s axiomatic that all creditors, wherever located, must immediately cease their efforts to collect on debts owed to them by that debtor, right? Not necessarily so, says the United States Court of Appeals for the Seventh Circuit, insofar as those creditors and their collateral are located outside of the United States.

USA, Insolvency & Restructuring, Litigation, Nelson Mullins Riley & Scarborough LLP
How Many Connections are Too Many? Bankruptcy Court Finds Multiple Attenuated Connections Not Enough to Warrant Disqualification of Debtors’ Professional

Introduction

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, United States bankruptcy court
Free and Clear of Post-Petition Guarantor Liability—Not So Fast: A Bankruptcy Discharge May Not Apply to Post-petition Claims Arising Under Pre-petition Contracts

The Bankruptcy Protector

USA, Insolvency & Restructuring, Litigation, Nelson Mullins Riley & Scarborough LLP
Make-Whole Payments and Solvent Debtors: A Potentially Widening Circuit Split

The United States Court of Appeals for the Fifth Circuit entered its (second) opinion in the case of In re Ultra Petroleum Corporation, Case No. 21-20008, on October 14, 2022, potentially widening a circuit split on the issue of “make-whole” payments. With the circuit split potentially growing, this issue could be ripe for a grant of certiorari.

USA, Insolvency & Restructuring, Litigation, Nelson Mullins Riley & Scarborough LLP, Ninth Circuit
Ultra IV: Make-Wholes, Never Say Never Again

Executive Summary

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Insolvency, U.S. Court of Appeals
Bankruptcy Court Continues to be a Battleground on Key Healthcare Provider Issues

The Bankruptcy Protector

USA, Healthcare & Life Sciences, Insolvency & Restructuring, Litigation, Nelson Mullins Riley & Scarborough LLP, Medicare, Medicaid, Bankruptcy, Ninth Circuit
SEQUANA: UK Supreme Court Explanation of the “Creditor Duty”

Introduction

Today, the UK Supreme Court considered for the first time the existence, content and engagement of the so-called “creditor duty”: the alleged duty of a company’s directors to consider, or to act in accordance with, the interests of the company’s creditors when the company becomes insolvent, or when it approaches, or is at real risk of, insolvency.

United Kingdom, Company & Commercial, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Insolvency, UK Supreme Court
A Rose by Any Other Name Might Get Your Lien Stripped Under Florida Law

To the long list of things people love about lawyers we can add last week’s holding by the Eleventh Circuit Court of Appeals that “Blvd.” is utterly unrecognizable as “Boulevard” – at least by Article 9 of the Uniform Commercial Code as enacted in Florida.

USA, Florida, Insolvency & Restructuring, Litigation, Nelson Mullins Riley & Scarborough LLP, Uniform Commercial Code (USA)
Bankruptcy Court Narrowly Construes Section 546(e) Safe Harbor

The Bankruptcy Protector

On August 18, 2022, the United States Bankruptcy Court for the Southern District of Indiana, in In re BWGS, LLC, No. 19-01487-JMC-7A, 2022 WL 3568045 (Bankr. S.D. Ind. Aug. 18, 2022), narrowly interpreted the safe harbor provision in section 546(e) of the Bankruptcy Code by refusing to dismiss a lawsuit against a guarantor whose liability was eliminated by the debtor’s payment to the bank that held the guarantee.

Overview on Section 546(e) of the Bankruptcy Code

USA, Insolvency & Restructuring, Litigation, Nelson Mullins Riley & Scarborough LLP, Bankruptcy, Private equity, US Congress