Trade creditors often face the issue of whether they are required to continue providing goods or services on credit to a customer that has filed chapter 11 bankruptcy. Unfortunately, the Bankruptcy Code fails to specifically address the rights and obligations of a trade creditor facing this dilemma, resulting in a tug-of-war created by the debtor’s need for continued goods and services and the creditor’s need for assurance of payment.
Your tenant files for bankruptcy-what’s your move? Debtors who are lessees under real property leases have certain rights regarding their lease under § 365 of the Bankruptcy Code. Essentially, the debtor has two options: 1) reject the lease or 2) assume the lease, provided that the debtor can cure any defaults existing under the lease. Additionally, the debtor may have the right to assume and assign the lease to a third party.
Following up on our coverage in the recent U.S. Supreme Court ruling that a debtor in a Chapter 7 case cannot ‘strip off’ or void a wholly unsecured junior mortgage under section 506(d) of the Bankruptcy Code, I had the opportunity to discuss the ruling with Colin O’Keefe of LXBN TV.
This morning, the United States Supreme Court ruled that debtors in Chapter 7 bankruptcy cases cannot “strip off,” or completely void, junior mortgages that—based on the value of the property and the amount of claims secured by senior mortgages—are completely underwater.
Timely proof of claim filings by secured creditors have “been a thorn in the side of many Chapter 13 cases involving secured creditors,” according to Judge Wood in In re Pajian. However, a recent Seventh Circuit decision may cause the industry to revise their current process for proof of claim filings. Bankruptcy Rule 3002(c) requires creditors to file proofs of claim within 90 days of the date set for the meeting of creditors. Bankruptcy courts have come to conflicting conclusions on whether Rule 3002(c)’s deadline applies to all creditors or merely unsecured ones.
A confluence of factors, including high debt, spiraling pension obligations, and lower sales and property tax revenues, has forced more municipalities to face insolvency than any time since the 1930s. The two largest municipal bankruptcies in history — Jefferson County, Ala., and Detroit, Mich. — recently ended. With the economy improving, we may never see the wave of municipal bankruptcies some commentators predicted.
On June 9, 2014, the U.S. Supreme Court issued the latest installmentin the jurisdictional saga of bankruptcy courts. As the highly anticipatedsequel to Stern v.
The High Court has recently affirmed the existence and scope of a liquidator’s equitable lien in Stewart v Atco Controls Pty Limited (in liquidation) [2014] HCA 15.
A liquidator is entitled to an equitable lien for the costs, charges and expenses (including the liquidator’s remuneration) incurred by the liquidator in realising assets brought into the estate, which lien takes priority over a creditor’s security: Re Universal Distributing Co Ltd (in liquidation) [1933] HCA 2.
A recent decision of the Supreme Court of Western Australia highlights the importance of properly registering security interests under the Personal Property Securities Act 2009 (Cth) (the Act).
Introduction
Early in his or her appointment a liquidator in a creditors' voluntary liquidation (CVL) should consider applying to the Court to convert the CVL to a Court ordered winding up in insolvency. Conversion may benefit the unsecured creditors, in whose interests the liquidator acts, by enabling the liquidator to pursue claims and make recoveries not available in a CVL.
The reasons liquidators have applied for conversion include: