In a consultation issued by the UK tax authority, HM Revenue & Customs (HMRC), on 26 February 2019, a change in the order of asset distribution in the insolvency of UK companies has been proposed. The amendments would newly favour certain taxes collected and held by an insolvent entity ahead of certain secured and unsecured creditors and would come into force in April 2020.

In a recent opinion, the Second Circuit Court of Appeals held that a seller licensed under the Perishable Agricultural Commodities Act (“PACA”) could not entirely setoff payables owed to a bankrupt PACA merchant against receivables owed by the debtor. The ruling is a reminder to PACA-regulated parties that otherwise common operational practices such as setoffs may not be recognized and enforceable in bankruptcy or in PACA-regulated transactions.

On January 16, 2019, Gymboree Group, Inc. and 10 affiliated debtors (collectively, “Debtors” or “Gymboree”) filed chapter 11 in the United States Bankruptcy Court for the Eastern District of Virginia (Richmond Division). On January 17, 2019, Gymboree, Inc. commenced a parallel proceeding in Canada under subsection 50.4(a) of the Bankruptcy and Insolvency Act (Canada).

On January 16, 2019, Gymboree Group, Inc. and 10 affiliated debtors (collectively, "Debtors" or "Gymboree") filed chapter 11 in the United States Bankruptcy Court for the Eastern District of Virginia (Richmond Division). On January 17, 2019, Gymboree, Inc. commenced a parallel proceeding in Canada under subsection 50.4(a) of the Bankruptcy and Insolvency Act (Canada).  

In In re Argon Credit, LLC, et al., Case No. 16-39654 (Bankr. N.D. Ill. Jan. 10, 2019), the United States Bankruptcy Court for the Northern District of Illinois recently held that a standby clause in a subordination agreement prevented a subordinated lender from conducting discovery on the senior lender's claim, pursuant to section 510 of the Bankruptcy Code.

Facts

In In re Argon Credit, LLC, et al., Case No. 16-39654 (Bankr. N.D. Ill. Jan. 10, 2019), the United States Bankruptcy Court for the Northern District of Illinois recently held that a standby clause in a subordination agreement prevented a subordinated lender from conducting discovery on the senior lender’s claim, pursuant to section 510 of the Bankruptcy Code.

Many of us were raised to believe that Santa Claus delivers our gifts before we wake up on Christmas Day. If you believe, behave, and send your wish list on time, you are virtually certain to receive what you want for Christmas. As we grow older, some of us (not me) begin to doubt the existence of Santa. But, with the growth of e-commerce within the last decade, no one can deny that more and more gifts are being delivered Santa-style. And for those who do not believe, well, the lesson has been costly. 

In a decision issued on December 28, 2018, the Sixth Circuit Court of Appeals affirmed the Bankruptcy Court and the District Court, awarding chapter 11 debtor and creditors’ committee professionals their attorneys’ fees based upon a “carve-out” provision in the cash collateral order and ahead of the secured creditors, despite conversion of the case to chapter 7. East Coast Miner LLC v. Nixon Peabody LLP (In re Licking River Mining, LLC), Case No. 17-6310, 2018 US. App. LEXIS 36677 (6th Cir. 2018).

In November 2011, AMR Corporation, the parent of American Airlines, filed chapter 11 in the United States Bankruptcy Court for the Southern District of New York. Through the bankruptcy, which was hugely successful, AMR was able to shed billions of dollars in operating expenses and become the largest airline in the United States. Part of the substantial savings came from AMR's ability to restructure its collective bargaining agreements with its unions.

The Bankruptcy Court for the Northern District of California recently granted a secured lender’s request for relief from the automatic stay, pursuant to sections 362(d)(1) and (d)(2) of the Bankruptcy Code, to allow a trustee’s sale of the debtor’s marina under state law. In re Delta Waterways, LLC, Case No. 18-42076-CN (Bankr. N.D. Cal. December 7, 2018). Several missteps and omissions by the debtor appear to have driven the Court’s decision.