We at The Bankruptcy Cave applaud the recent ruling by Judge Whipple of the Bankruptcy Court for the Northern District of Ohio, seeking to make the post-confirmation parties, processes, and procedures far more transparent. In In re Affordable Med Scrubs, LLC,[1] Judge Whipple declined to approve a disclosure statement for a debtor’s liquidating plan.
We’ve all seen it. The business opportunity looks enticing but is laced with risk about a potential bankruptcy filing down the road. As bankruptcy lawyers we are often asked how deals can be structured to prevent a potential bankruptcy filing.
Editor’s Note: On June 16, 2016, The Bankruptcy Cave gave you our summary of the controversial Sabine decision. At that time, post-hearing motions were pending.
The Bankruptcy Code permits a bankruptcy trustee to compel return of a payment made to a creditor within 90 days before a bankruptcy petition. 11 U.S.C. § 547(b)(4)(A). The justification for compelling the return of preference payments is to level the playing field among creditors by not rewarding those who, perhaps, pressed the debtor the hardest on the eve of bankruptcy.
On March 9, 2016, Bankruptcy Judge Shelley Chapman of the Southern District of New York issued her decision on the Debtor’s motion to reject certain contracts in Sabine Oil & Gas Corporation’s Chapter 11 case.[i] The decision, which allowed Sabine to reject “gathering agreements”
A recent decision out of a New Jersey Bankruptcy Court highlights a loophole in the Bankruptcy Code which may allow Chapter 7 debtors to keep significant assets out of the hands of trustees and creditors.
On May 16, 2016 the United States Supreme Court issued an opinion regarding the meaning of “actual fraud” under the Bankruptcy Code. Husky Int’l Electronics, Inc. v. Ritz represents a win for creditors by making it easier to show that a debtor committed fraud. A showing of a more general fraud, as opposed to a specific false representation by the debtor, will suffice to prevent certain debts from being discharged in bankruptcy.
Background
A recent case from the 11th Circuit illustrates the procedural perils of litigation arising from a bankruptcy case but ultimately tried in the district court. In Rosenberg v.
The Supreme Court’s Decision:
Either from our prior posts here and here, or from the great posts from Stone and Baxter’s Plan Propon