The Second Circuit affirmed the judgment of lower courts upholding the application of certain swap agreement safe harbors in section 560 of the U.S. Bankruptcy Code (the Bankruptcy Code).

The increasing number of high-profile bankruptcies across a number of commercial hubs has brought renewed focus on important questions of jurisdiction arising out of the tension between local insolvency regimes on the one hand, and parties’ arbitration agreements on the other.

Since the end of the first quarter of 2020, bankruptcy professionals have been planning for a substantial increase in business bankruptcies. The newest statistics tell us that the wait is over. These bankruptcy filings follow the sustained economic contraction rooted in the COVID pandemic. But it would be too simplistic to say that COVID is the sole cause of this trend. Most of the businesses that have filed faced other challenges, such as heavy debt burdens, deteriorating markets or strategic missteps.

The number of so-called mega-bankruptcies filed during the first half of the year tells only part of the story. The pain is not just at the top, but spreads across multiple sectors of the economy. Overall, business bankruptcy filings are 30% higher than they have been at any time during the last 5 years. And, with attempts to re-start the economy already sputtering, the news during the second half could be worse.

Recent insolvencies remind us that, when a seller of goods is unpaid, the question of possession leaps to the foreground. There is little value in a claim against an insolvent buyer for damages or for the price.

My latest contribution to BloombergLaw was the following piece on some of the unique issues and challenges presented for self-insured employers and their plan administrators when those employers seek (or contemplate) bankruptcy relief. In brief:

For those following the fallout from the Fyre Festival, the drama continues. Last week, model and influencer Kendall Jenner settled a bankruptcy lawsuit for $90,000 relating to her promotion of the Festival.

The UK Department for Business, Energy and Industrial Strategy introduced the Corporate Insolvency and Governance Bill (the Bill)¹ into Parliament on 20 May 2020. The Bill is due to proceed through Parliament on an accelerated timetable and is expected to come into force without changes towards the end of June 2020.

Guiding a business as a chief executive officer is difficult in the best of times. In the midst of a pandemic, uncertainty is rampant. However, in that uncertainty often times there is opportunity.

Sometimes Chapter 11 is a viable and appropriate strategy for an organization to right size its balance sheet and adjust its long term contracts. CEO's must adapt to changing circumstances. Careful consideration of the impacts - both positive and negative - of Chapter 11 can be critical to guiding an organization and in some cases, it may allow a business to thrive.