Including an unsecured creditor  in an agreed payments waterfall does not by itself confer on that unsecured creditor  the benefit of a mortgagee’s usual duties on enforcement of security, or a direct claim against the sale proceeds.

You may recall the holding and analysis of ASARCO [1]/ from Jay’s previous post, here.

The Seventh Circuit (which covers Illinois, Indiana, and Wisconsin) appears to have added a new and potentially conflicting standard in analyzing  a third-party transferee’s “good faith” defense to a fraudulent transfer claim.  The good faith defense protects a third-party transferee from having to return the value it received from a debtor as a part of a fraudulent transaction so long as that third-party transferee entered into the transaction with the debtor in good faith. 

This post originally appeared on In The (Red): The Business Bankruptcy Blog, which I created for CEOs, CFOs, boards of directors, credit professionals, in-house counsel and others to stay informed about important business bankruptcy issues and developments.

An official notice from the Judicial Conference of the United States was just published announcing that certain dollar amounts in the Bankruptcy Code will be increased ever so slightly — only about 3% this time — for new cases filed on or after April 1, 2016.

Many start-up companies backed by venture capital financing, especially those still in the development phase or which otherwise are not cash flow breakeven, at some point may face the prospect of running out of cash. Although many will timely close another round of financing, others may not. This post focuses on options available to companies when investors have decided not to fund and the company needs to consider a wind down.

For a distressed company running low on capital, an investment from insiders may represent a last best hope for survival. Insiders may be willing to risk throwing good money after bad for a chance to save the company even when any third party would stay safely away. Insiders  of a failing company may also have an ulterior motive for making an eleventh hour capital infusion, as they may use their control over a distressed company to enhance their position relative to the company’s other creditors. The line between a good faith rescue and bad faith self-dealing is often a hazy one.

What better time than the holiday season to discuss “gifting” in the context of chapter 11 cases.  “Gifting” commonly refers to the situation where a senior creditor pays (or allocates a portion of its collateral for the benefit of) one or more junior claimholders.  Gifting is often employed as a tool to resolve the opposition of a junior class of creditors, who are typically out-of-the-money, to the manner in which the bankruptcy case is being administered.  For instance, creditors’ committees may seek gifts from senior creditors to guarantee a recovery for general unsecured

Over the summer, four appellate court decisions addressed the doctrine of equitable mootness: In re Tribune Media Co., 799 F.3d 272 (3d Cir. 2015); In re One2One Commc’ns, LLC, No. 13-3410, 2015 WL 4430302 (3d Cir.

A decision last month by the U.S. Bankruptcy Court for the District of New Hampshire serves as a good reminder that, although helpful, Bankruptcy Code Section 365(n)’s protection for intellectual property licenseesdefinitely has its limits.