When a company files for bankruptcy, employees are faced with uncertainty on a number of issues. Everything from outstanding wages to benefit entitlements are suddenly at risk. Further, when a company becomes insolvent, employees are often laid off in circumstances that fail to satisfy statutory or common law notice period entitlements. However, under the Bankruptcy and Insolvency Act (“BIA”), employees are often barred from fully recovering what they are owed.

Compensation for bankruptcy professionals employed in bankruptcy cases is governed by Section 330 of the Bankruptcy Code. Section 330(a)(1) of the code provides, in pertinent part, that "the court may award to ... a professional person employed under Section 327 or 1103—(A) reasonable compensation for actual, necessary services rendered." Professionals whose employment is approved by the bankruptcy court consequently must file fee applications, to be reviewed and approved by the court for work performed in the bankruptcy case.

Earlier this summer an affiliate of Rogers Communications Inc. acquired all of the issued and outstanding shares of the corporation carrying on the Mobilicity wireless business in the context of Mobilicity’s Companies’ Creditors Arrangement Act (CCAA) proceeding.

On Jan. 21, in Official Committee of Unsecured Creditors of Motors Liquidation v. JPMorgan Chase Bank (In re Motors Liquidation), No. 13-2187, (2d Cir. Jan. 21, 2015), the U.S. Court of Appeals for the Second Circuit addressed whether a UCC-3 termination statement, which was improperly filed as part of the repayment of an unrelated loan, may be considered effective to terminate the security interest in question, even where none of the parties intended that result.

Section 303 of the Bankruptcy Code provides creditors with a mechanism to force a recalcitrant debtor into bankruptcy through the filing of an involuntary petition for relief. Pursuant to this section, an involuntary bankruptcy case may be commenced only under Chapter 7 or 11 of the Bankruptcy Code, and may only be brought against a person otherwise qualified to file a voluntary petition. Where the purported debtor has fewer than 12 creditors, the involuntary petition need only be filed by a single creditor.

An insolvent entity will often have one or more businesses that, once separated from the insolvent organization or cleansed of their existing liabilities, is quite attractive acquisition targets.

The world may end in fire and ice but, at least for now, it will not end in the bankruptcy court.[1]

In a case of first impression in Texas, the United States Bankruptcy Court for the Southern District of Texas held that the former majority member of a chapter 11 LLC debtor had to relinquish control of the LLC's Facebook page and Twitter account because they were property of the LLC's bankruptcy estate. In re CTLI, LLC, Case No. 14-33564, 2015 WL 1588085 (Bankr. S.D. Tex. April 3, 2015). CTLI, LLC was a Texas gun store and shooting range doing business as Tactical Firearms.

Under the Bankruptcy Code, a debtor in possession operates its business “as usual” during the pendency of a case. Likewise, in most cases, prepetition corporate governance practices and procedures should continue post-petition. In fact, as Judge Sontchi recently held in In re SS Body Armor I, Inc., Case No. 10-1125(CSS) (Bankr. D. Del. April 1, 2015), the right of a shareholder to compel a shareholders’ meeting for the purpose of electing a new board of directors continues during bankruptcy.  Absent “clear abuse,” the automatic stay of 11 U.S.C.

In an effort to protect the property of a bankruptcy estate, Section 362(a) of the U.S. Bankruptcy Code imposes an automatic stay on most proceedings against a debtor in bankruptcy. The policy of this section is to grant relief to a debtor from creditors, and to prevent a "disorganized" dissipation of the debtor's assets. (See, e.g., U.S. Securities and Exchange Commission v. Brennan, 230 F.3d 65, 70 (2d Cir. 2000).) However, the scope of the automatic stay is not all-encompassing.