Parties to all legal proceedings - including bankruptcy proceedings - are entitled to Constitutionally protected due process rights, including reasonable notice and an opportunity to be heard. In the bankruptcy context, the debtor must give known creditors reasonable notice of certain critical events, including the sale of the debtor’s assets and the deadline to file claims against the debtor.
As previously reported, Judge Elias in Los Angeles had indicated an intention to bring to conclusion a long standing discussion with counsel regarding the extent of disclosure regarding asbestos bankruptcy trusts that plaintiffs will be obliged to provide when respon
When an insolvent entity files for bankruptcy, it can be tough to be a creditor. But holding equity — stock in a corporation or a membership interest in an LLC, a limited liability company — can be even worse. Under bankruptcy’s “absolute priority rule,” creditors generally must be paid in full before equity gets anything. That usually means that holders of equity, or claims treated as equity, get nothing.
J. Paul Getty once said, “Formula for success: rise early, work hard, strike oil.” However, with crude oil prices nearly half of what they were a mere six months ago, Getty’s formula may not hold as true as it once did. In the latest EIA STEO Report (April 2015), the DOE projects oil prices for WTI to remain around or below $60 per barrel for the balance of 2015 and grow to $70 per barrel in 2016.
Every year, otherwise successful technology companies lose untold sums of money and valuable intellectual property rights because they do not act when a customer or business partner files for bankruptcy protection. Far less effort is usually required to preserve these rights than what may be involved in a major piece of litigation; but, in almost every case, the company must take active and timely steps to ensure that its interests are protected.
Illinois legislators are considering a bill that would amend the Illinois Municipal Code to allow municipalities and other local government entities to file for bankruptcy. Representative Ron Sandack (R-Downers Grove) has called it a “measure of last resort” for municipalities with increasing debts, including police and firefighter pension obligations. Governor Rauner has indicated previously that he supports the concept, and local leaders are evaluating the need for such protection in light of dire fiscal projections.
A recent decision by the Bankruptcy Court for the Southern District of New York may enhance the ability of bankruptcy trustees and creditors committees to challenge allegedly fraudulent transfers that could qualify for protection under the “safe harbor” of section 546(e) of the Bankruptcy Code.
In a “loan-to-own” investment, an investor acquires secured debt at a discount to leverage the face amount of the debt in an asset purchase or debt-to-equity swap. For example, if an investor can buy US$50 million worth of debt for US$25 million, it can, in a bankruptcy proceeding, bid on the underlying assets that secure the debt at a 50 percent discount, because the investor can credit bid the face value of the debt as the equivalent of cash in a sale of collateral in bankruptcy, thus creating a competitive advantage over cash or strategic bidders.
In recent months, the US has seen a staggering increase in the number of retailers, both large and small, filing for bankruptcy. Among others, Dots, Alco Stores, Radio Shack, Deb Shops, Wet Seal, and Delia’s have each filed for bankruptcy protection in the past six months alone.