As witnessed repeatedly from countless national news sources, bankruptcy bulletins and scholarly articles, bankruptcies within the retail and restaurant industries have been booming. Within Fredrikson & Byron’s national practice alone, landlord and lessor clients found themselves wrapped up in many of these national bankruptcy cases, including those for CEC Entertainment, Inc. (better known as Chuck E. Cheese), Pier 1 Imports, Inc., and Vitamin OldCo Holdings, Inc., (f/k/a GNC Holdings, Inc.), amongst many others.
Introduction
Congress recently sent two different bills to the President’s desk that are designed to provide an easier path for family farming operations and small businesses to reorganize under the Bankruptcy Code: the Family Farmer Relief Act of 2019 and the Small Business Reorganization Act of 2019.
The legalization of marijuana and the Bankruptcy Code continue to proceed on a crash course. A majority of states have legalized marijuana for medical use, and a growing number have legalized recreational use as well. As a result, the industry is rapidly expanding – national sales in legal markets have increased 34 percent in 2018 to $10.8 billion.
The Commissioner of Inland Revenue (Commissioner) appealed a decision of Associate Judge Christiansen to approve a payment proposal by Mr Wilson to discharge a debt he owed the Commissioner and thereby avoid a declaration of bankruptcy.
In Body Corporate 341188 v Kelly, a judgment debtor sought to overturn an Associate Judge's decision not to set aside a bankruptcy notice. The notice was in respect of a District Court judgment and a costs order obtained by the Body Corporate in a separate High Court proceeding. The debtor argued (among other grounds) that the notice was invalid because it was in respect of two judgment debts rather than one.
In Strategic Finance Limited (in receivership & in liquidation) and Strategic Nominees Limited (in receivership) v Bridgman and Sanson CA 553/2011 [2013] NZCA 357 the Court of Appeal has, for the moment, settled what constitutes an "account receivable", and this provides certainty regarding the scope of the assets available to meet preferential creditor claims ahead of secured creditors with general security agreements.
Re Tames involved an application for the Court to approve a debtor's proposal to creditors under section 333 of the Insolvency Act. The applicant was the provisional trustee for the proposal and sought the Court's approval of the proposal's terms. If the proposal was accepted, Ms Tames (the debtor) would only pay $0.05 on the dollar to her unsecured creditors. The application for approval was opposed by ASB, one of Ms Tames' unsecured creditors.
In Hutchins v Edwards [2013] NZHC 336, the High Court declined an application for an adjournment by a debtor who sought further time to liquidate property in order to pay a judgment debt.
Receiverships and assignments for the benefit of creditors (ABCs) can be important tools for banks and other lenders when a borrower is suffering financial distress. Because they are often cost-effective and efficient, receiverships are being used increasingly throughout the country, and ABCs are commonly utilized in many states. In Minnesota, however, the statutes regarding receiverships and ABCs were outdated or largely ignored; as a result, receivership practices and procedures are not uniform, and ABCs are almost never used.