In post-confirmation proceedings, bankruptcy courts maintain the ability to clarify a plan where silent or ambiguous, and interpret a plan to advance equitable considerations. However, bankruptcy courts are not allowed to modify a plan outside the confines of section
Bankruptcy can be a lifeline to those individuals trying to get out from under a mountain of debt, but it becomes a point of frustration for the companies forced to move on without collecting the money they were owed.
Bankruptcy. A word that provokes more fear, loathing and foreboding failure than “world premiere” does to certain silver-haired symphony subscribers hoping to snooze again to Brahms. And no wonder when even venerable performing arts companies from the Philadelphia Orchestra to New York City Opera have gone through the reorganization wringer – and not always successfully.
Filing an involuntary bankruptcy petition is an alternative not often considered by creditors. However, faced with the possibility of having to write-off a claim, a creditor may choose to file an involuntary bankruptcy petition in order to put the debtor under the control of the Bankruptcy Code and the bankruptcy court. Such a move comes with risk, and a recent Eleventh Circuit Court of Appeals decision may expand that risk.
If your small business is struggling with debt, bankruptcy relief may be an option.
You’re lying awake at night wondering how you’re going to make payroll. Many of your suppliers are threatening to switch you to cash on delivery (COD) or to cancel your account all together. You know the IRS will soon be knocking on your door to collect taxes. You’re in financial trouble and you think, “What am I going to do?”
The realities of the bankruptcy venue provisions require potential debtors and their advisers to prudently weigh the legal significance of a bankruptcy filing in various courts. In a recent decision, U.S.
Since its 1989 opinion in Folendore v. Small Business Admin., the Eleventh Circuit Court of Appeals has allowed debtors to completely strip off and void wholly unsecured junior liens in Chapter 7 bankruptcies under Section 506(d) of the Bankruptcy Code. Complete lien stripping forever prevents creditors from seeking relief against a debtor’s collateral if it is underwater, even if the property value later increases. Since Chapter 7 debtors are also discharged of personal liability, subordinate debt is, in such cases, rendered worthless.
That may soon change.
In an effort to protect the property of a bankruptcy estate, Section 362(a) of the U.S. Bankruptcy Code imposes an automatic stay on most proceedings against a debtor in bankruptcy. The policy of this section is to grant relief to a debtor from creditors, and to prevent a "disorganized" dissipation of the debtor's assets. (See, e.g., U.S. Securities and Exchange Commission v. Brennan, 230 F.3d 65, 70 (2d Cir. 2000).) However, the scope of the automatic stay is not all-encompassing.
A recent Delaware District Court decision concerning an appeal of a bankruptcy settlement clearly provides support for the use of tender offers or other exchange, or settlement mechanics permitted under applicable federal securities laws prior to and outside a plan of reorganization. In essence, this decision permits debtors to utilize exchange offers to repurchase outstanding securities at a discount, or obtain more favorable terms during a bankruptcy proceeding and prior to confirmation of a plan of reorganization.
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How will filing bankruptcy affect my credit score?