Patriot National, Inc., a Fort Lauderdale, FL-based provider of technology and outsourcing solutions to the insurance industry, has, along with eighteen affiliates and subsidiaries, filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-10189).

The New Year brings with it new changes to the bankruptcy code. These recent rule changes apply to any case filed after December 1, 2017, and may apply retroactively to pending proceedings in those instances where it would be “just and practicable.” Although many of the changes deal with consumer bankruptcies, key changes will affect secured creditors.

Changes concerning proof of claim deadlines

On September 22, 2017, the First Circuit Court of Appeals held that § 1109(b) of the Bankruptcy Code (the “Code”) provides a creditors’ committee with an “unconditional right to intervene” in an adversary proceeding.[1]  In reaching this conclusion, the court reversed the District Court for the District of Puerto Rico’s order denying an intervention motion and distinguished its own precedent, on which the District Court had relied.  This decision further bolsters the right of creditors’ com

Nearly every year, there are changes to the Federal Rules of Bankruptcy Procedure. 2017 was no exception, and new rules went into effect on December 1, 2017. Creditors should be aware of the new timeframe for filing claims and new relief that can be sought in Chapter 12 and Chapter 13 plans. Below is a summary of some of the new rule changes.

Rule 3002—Filing a Proof of Claim or Interest

PES Holdings, LLC (d/b/a Philadelphia Energy Solutions) has, along with eight of its subsidiaries and affiliates, filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-10122). Headquartered in Philadelphia, PA, PES operates the largest oil refining complex on the East Coast and is the tenth largest refiner in the United States.

Continuing low interest rates and generally improved economic conditions in the U.S. and worldwide during 2017 have reduced financial distress and the need for business bankruptcies in most sectors. However, out-of-court financial restructurings and Chapter 11 bankruptcies will continue in 2018 due to significant market changes in the energy, retail and health care industries that have developed over the past several years.

Hobbico, Inc. , a Chicago-based distributor of radio-control and general hobby products, along with seven of its affiliates, has filed a petition for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-10055).

KIKO USA, Inc., a retailer of professional makeup and skincare products based in New York, NY, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Case No. 18-10069).

On November 7, 2017, a panel of the Third Circuit, in an unreported decision, upheld the District Court’s determination that intended loss equaled the amount of concealed assets in a bankruptcy fraud case in which creditors were paid in full. U.S. v. Free, 2017 WL 5664671 (3d Cir. – Nov. 7, 2017). Significantly, Free filed for reorganization under Chapter 13 of the Bankruptcy Code, but he disclosed assets that exceeded his debts by several hundred thousand dollars.

On January 8, 2018, Senators John Cornyn (R-TX) and Elizabeth Warren (D-MA) introduced the Bankruptcy Venue Reform Act of 2017. The bill would require that individual debtors file in the district where their domicile, residence, or principal assets are located, and would require corporate debtors to file in the district in which their principal assets or their principal place of business is located.