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.
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.
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?”
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.
All’s fair in love bankruptcy and war . . . except when one side decides to keep fighting after there’s been a truce. The petitioning creditors in In re BG Petroleum, LLC, a recent decision from the Bankruptcy Court for the Western District of Pennsylvania, apparently forgot this rule.
How will filing bankruptcy affect my credit score?
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.
Case Summary
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.
E ven well-intentioned people run into financial difficulty. Unfortunately, falling behind on one’s taxes often leads to a downward spiral, and it is not uncommon for a taxpayer who cannot pay her tax obligations to decide not to file a return. Not only does such a failure to file expose the taxpayer to additional penalties and criminal liability, but it may have devastating ramifications if she subsequently files for bankruptcy.
On May 30, 2014, hedge fund Moore Capital (Moore) brought suit against the Lehman Brothers bankruptcy estate (Lehman) in the Southern District of New York bankruptcy court, seeking a declaratory judgment that it acted properly when it terminated swap agreements and setoff termination amounts in the time between the filing of the parent company Lehman Brothers Holdings Inc. (LBHI) and the eve of bankruptcy filings weeks later of Moore’s Lehman counterparties1.