Winding Down. If a corporation’s board of directors decides that the business needs to be wound down, there are a number of legal paths to consider. Determining the best approach is fact-dependent, and the corporation and its board should get legal advice before making a decision.

Under section 550(a) of the Bankruptcy Code, a trustee or debtor in possession may recover property (or its value) that has been fraudulently transferred “from the initial transferee or the entity for whose benefit the avoided transfer was made.”  While the trustee’s right to recover from an initial transferee is absolute once a transfer is deemed fraudulent, a subsequent transferee may assert affirmative defenses that could prevent recovery by the estate of an otherwise avoidable transfer.  As a result, defendants in fraudulent transfer litigations often take great pains to chara

The Financial Times has reported that Towergate, a loss making insurance broker with debts of up to £1bn, may be about to breach the terms of its loans. According to these reports, a paymentis due to Towergate’s secured creditors on Monday, 2nd February 2015, and another is due to its unsecured creditors two weeks later. These payments are reported to be worth about £30m. Towergate’s board is said to be weighing up rival restructuring bids this weekend, in an effort to save the business.

Applicants who seek ex parte relief under the Companies’ Creditors Arrangement Act (CCAA) have an obligation to make full and fair disclosure of all material facts to the court.

On December 8, 2014, the American Bankruptcy Institute’s Commission to Study the Reform of Chapter 11 issued an extensive report detailing hundreds of recommended changes to the Bankruptcy Code to address significant economic and financial developments since the enactment of the Bankruptcy Code in 1978.  The recommendations aim to reduce the cost of chapter 11, increase the predictability of disputes by resolving ambiguous and divergent case law, provide more flexibility for debtor in possession financing, curb the power of senior lenders, and increase protections for creditors when a

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Atlantic City has been struggling in recent years, and it remains unclear how the city’s problems will improve in the face of a deteriorating tax base.  According to the Update Report of Governor’s Advisory Commission on New Jersey Gaming, Sports and Entertainment, total Atlantic City casino revenues fell from a peak of $5.2 billion in 2006 to just $2.9 billion in 2013, and are projected to be approximately $2.5 billion in 2014. Four of the city’s 12 casinos have closed this year, including Caesars Entertainment Corp.’s The Atlantic Club and Showboat Atlantic City, the Trump Plaza

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Almost every year, changes are made to the set of rules that govern how bankruptcy cases are managed — the Federal Rules of Bankruptcy Procedure. The changes address issues identified by an Advisory Committee made up of federal judges, bankruptcy attorneys, and others.

For years, it has been the rule in the Ninth Circuit that a chapter 11 plan cannot discharge or otherwise affect the obligation of a non-debtor owed to a third party. This view interprets section 524(e) of the Bankruptcy Code, which provides that “the discharge of a debt of the debtor does not affect the liability of any other third entity on, or the property of any other entity for such debt,” to specifically prohibit the permanent release, discharge, or injunction of non-debtors. See 

United States Bankruptcy Courts, particularly in New York and Delaware, are already a destination for multinational corporate bankruptcy filings, but a recent study co-authored by Stephen J. Lubben, a Seton Hall Law School professor and frequent contributor to The New York Times’ DealBook blog, suggests that the current volume of foreign debtors filing in the U.S.