Key Takeaways:
Currently there are no clear laws specifically addressing the means for addressing insolvency issues for debtors and creditors involved in the Cannabis industry. Like the industry itself, the laws are evolving. Using a Cannabis grower business as an example, at this time the Federal Court system is not available to address such entities insolvency issues.
Our private credit clients are preparing for the next restructuring cycle and have called us about ultrafast bankruptcy cases. These chapter 11 cases have grabbed headlines because they lasted less than a day. Specifically, FullBeauty Brands and Sungard Availability Services emerged from bankruptcy in 24 hours and 19 hours, respectively. Is this a trend and which companies are best suited to zip through chapter 11?
A. Prepacks, Pre-Negotiated Cases, and Free-Falls
Over the years, much has been written about the Bankruptcy Code’s treatment of small businesses, and the American Bankruptcy Institute Commission’s testimony to Congress this summer made clear that the existing law fell short of providing necessary relief for small businesses. For example, of the 18,000 small business bankruptcy cases filed between 2008 and 2015, less than 27% of those cases resulted in confirmed plans of reorganization. And these numbers excluded countless small businesses that, for a variety of reasons, did not or could not seek bankruptcy relief. See Robert J.
Over the past several years, much has been written about how numerous bankruptcy courts have interpreted and enforced bankruptcy and insolvency-related provisions in intercreditor agreements, subordination agreements and other “agreements among lenders” when they may affect a debtor and its estate.
On May 20, 2019, in Mission Product Holdings, Inc. v. Tempnology, LLC, 587 U.S. ___ (2019), the Supreme Court resolved an area of ongoing concern for parties to trademark licenses. The court addressed a circuit split on whether a trademark licensee may continue to use a trademark for the term of the license, after the license has been rejected in bankruptcy.
Starting now, all creditors must exercise more caution when trying to collect against discharged bankruptcy debtors, because a creditor’s good faith belief that the discharge injunction did not apply is no longer a viable defense. On Monday, June 3, 2019, the U.S. Supreme Court clarified the standard for awarding sanctions against a creditor for violation of the discharge injunction, unanimously holding that a court may hold a creditor in civil contempt for violating a discharge order if there is “no fair ground of doubt” that the discharge order barred the creditor’s conduct.
In Lagos v. United States, 584 U.S. ___ (2018), the Supreme Court issued a unanimous ruling that limits the ability of corporate victims of fraud to seek reimbursement of legal fees for internal investigations. The case began when GE Capital discovered that Sergio Lagos falsified numerous invoices for his company, which he used as collateral to obtain tens of millions of dollars in loans from GE Capital.
Bankruptcies and other debt restructuring activities for health care providers are on the rise, and recent headlines related to the industry suggest further stormy weather ahead. Please join Dykema attorneys Mark Andrews and Lea Courington as they discuss the intersection of healthcare and insolvency. What is the current state of the industry? Why are nursing homes, hospitals and other healthcare institutions in financial trouble? What factors are changing reimbursement rates? What effect does litigation have on the success or failure of the nursing home industry?
2017 Proskauer Annual Review and Outlook for Hedge Funds, Private Equity Funds and
Other Private Funds
2017 Proskauer Annual Review and Outlook for Hedge Funds, Private Equity
Funds and Other Private Funds
The following annual review and outlook (Annual Review) is a summary of some of the significant changes and developments that occurred in the past year and certain recommended practices that investment advisers to hedge funds, private equity funds and other private funds (collectively, private funds) should consider when preparing for 2018.