The Bankruptcy Protector

Chapter 11 debtors operate under various levels of uncertainty. Often a company is dependent upon others to provide financing or close transactions necessary for the company’s survival. Such was the case of Eclipse Aviation, which filed for Chapter 11 bankruptcy in November 2008, with an (apparent) agreement to sell itself to its largest shareholder.

In In re Short Bark Industries Inc., 17-11502 (Bankr. D. Del. Sept. 11, 2017), Judge Kevin Gross of the United States Bankruptcy Court for the District of Delaware read the Supreme Court’s holding in Jevic narrowly in connection with a settlement of a dispute on DIP financing.

The bankruptcy bar is abuzz following the Supreme Court’s recent decision in Czyzewski v. Jevic Holding Corp., 15-649, 2017 BL 89680, 85 U.S.L.W. 4115 (Sup. Ct. March 22, 2017), holding that bankruptcy courts may not approve structured dismissals that do not adhere to the Bankruptcy Code’s priority scheme.

A debtor cannot recover sanctions or attorneys’ fees under 11 U.S.C. § 362(k) when the debtor admits to having suffered no actual damages and the filing of a motion for sanctions was not necessary to remedy a stay violation.[1] Denying the debtor’s motion for sanctions, the U.S.

As the Courts have often stated, in bankruptcy and insolvency law, time is of the essence. Bankruptcy and insolvency legislation allows the Court to craft orders with the specific aim of shielding a Receiver against frivolous actions, such that the Receiver may complete his task of managing property while enforcing the rights of a secured creditor in a timely fashion. The HRH Hotels Ltd. case is one such example where the Court ruled that a plaintiff's claim against the Receiver was frivolous and constituted a collateral attack on the Receivership process.

The recent decision in Iona Contractors Ltd. v. Guarantee Company of North America, 2015 ABCA 240 [Iona] (PDF) (leave to appeal to the Supreme Court of Canada denied) clarifies the law regarding provincial statutory trusts in the insolvency context.

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Bankruptcy lawyers across the country learned this lesson in 2015: A fine year can be a flat year.