Summary

Having successfully obtained judgment for your client in a case where your firm of solicitors is acting under a conditional fee agreement (CFA), it is only natural that thoughts will turn to the firm’s own impending financial reward. But the terms of a CFA, negotiated at the outset of the case, can prove to be a barrier to their underlying commercial purpose: payment by result.

Last month, the United States Court of Appeals for the Eleventh Circuit upheld the Bankruptcy Court and United States District Court for the Middle District of Florida determination that the authorized swapping of parts among aircraft to maximize efficiency “did not and could not commingle the participants’ ownership interests.” In re Avantair Inc., No. 15-10303, slip op. (Eleventh Circuit, February 3, 2016). The ruling helps to clarify uncertainties regarding the legal status of fractional ownership arrangements.

Brief Overview

Bad news for midstream counterparties of bankrupt oil & gas producers: you may not be able to rely (as much as you might have expected) on covenants “running with the land” to save your contracts from rejection in bankruptcy.

Recent court filings highlight the need for health care providers to protect patient privacy by implementing specific procedures when filing claims in bankruptcy cases of their patients, as a matter of federal bankruptcy and other law. Last year, WakeMed, a Raleigh, North Carolina-based health care system, asserted a claim for $553.00 for unpaid medical services in a chapter 13 consumer bankruptcy case.

Section 262(1) of the IA 1986 provides that a debtor, creditor or nominee may apply to the court where: (a) a voluntary arrangement approved by a creditors’ meeting summoned under section 257 unfairly prejudices the interests of a creditor of the debtor, or (b) there has been some material irregularity at or in relation to such a meeting. 

To the extent authorized by a State, Chapter 9 of the Bankruptcy Code allows municipalities (defined as a “political subdivision or public agency or instrumentality”) of that State – including public hospitals – to reorganize their debts in the face of insolvency. Municipalities achieve this goal through implementation of a court-approved plan of adjustment. Although the standards for confirming (approving) a Chapter 9 plan resemble the well-established standards for confirming a Chapter 11 plan, differences exist.

Working with distressed businesses always presents a wide array of challenges. Solving a distressed company’s problems, or your problems with it, rarely is limited to a single legal discipline, set of laws or state or federal policy. When a distressed enterprise is involved, all kinds of interests and policies can and do clash.

Be careful what you’ve promised your customers…or what has been promised about data you buy!

On May 4, 2015, Vice Chancellor Travis Laster of the Delaware Court of Chancery issued a decision in Quadrant Structured Products Co., Ltd. v. Vertin,¹ analyzing creditors’ standing to bring derivative claims against directors and officers of Delaware corporations. Building on the Delaware Supreme Court’s jurisprudence regarding fiduciary duties owed to creditors,²Vice Chancellor Laster’s opinion has two primary holdings.