Reversing a decision by the Sixth Circuit Court of Appeals, the U.S. Supreme Court ruled unanimously that severance payments to employees who were involuntarily terminated as part of a Chapter 11 bankruptcy were taxable wages subject to Social Security and Medicare (FICA) taxes. The decision disappointed many who had hoped the court would uphold the earlier appeals court ruling that certain severance payments should be exempt from FICA taxes as supplemental unemployment compensation benefits (SUBs).

Interest in cryptocurrencies is growing, even after Mt. Gox, formerly the largest international bitcoin exchange, filed for bankruptcy in Japan following $473 million in losses.

Four decades ago, when I began my legal career, bankruptcy sales were held in low regard. They were regarded, and often referred to, as “fire sales” that were almost certain to attract no interested parties other than bottom feeding liquidators seeking to pay only a fraction of the value of the marketed assets. For this reason, potential sellers steered clear of bankruptcy.

Chances are if you are a provider of goods or services and do business pursuant to some form of a short-term or long-term credit arrangement that you have received correspondence from a bankruptcy Trustee or a Chapter 11 debtor demanding money on the basis of an alleged “preference.” Perhaps some of you have even been served with a formal complaint demanding the same. If so, then this article is meant to take some of the mystery out of preferences and to offer some advice as to what to do when you receive such a correspondence.

WHAT IS A PREFERENCE?

On April 17, 2014, the United States Bankruptcy Judge Sean H. Lane issued an opinion in the Waterford Wedgwood bankruptcy discussing at length one of the defenses available to preference defendants.  The opinion turns upon the scope of “ordinary business terms,” the objective prong of the ordinary course of business defense.

As predicted, the court in Tokyo has ruled that Mt. Gox will be liquidated. An “Announcement of Commencement of Bankruptcy Proceedings” was posted overnight April 24 by the Japanese bankruptcy trustee Nobuaki Kobayashi on the Mt. Gox site to confirm that the company is officially in bankruptcy (liquidation) in Japan.  The Announcement also includes a “Frequently Asked Questions” section to give a very high level overview of the liquidation process.

After the housing market collapse, many cities and towns fell on hard times and have yet to recover.  In quite a few communities, housing prices remain low, municipal debt levels are unsustainable, and attempts to raise revenue have been rejected by voters—who are often cash-strapped themselves.  Bankruptcy offers breathing room, political cover for tough decisions, and the chance to renegotiate collective bargaining agreements and restructure debt.  The bankruptcy process is frequently used by businesses and individuals seeking a “fresh start.”  Why don’t more dist

In an important decision for lenders, the 1st Circuit Court of Appeals recently decided In re SW Boston Hotel Venture LLC, holding that a bankruptcy court was right to give a lender a claim for post-petition interest beginning on the date of the sale of its collateral rather than the commencement date of the debtor’s bankruptcy case.

A recent opinion out of the United States Bankruptcy Court for the Eastern District of Virginia (Richmond Division) serves as a reminder to secured creditors to steer clear of conduct that a bankruptcy court may deem inequitable and provide the court with cause to limit the secured creditor’s credit bid rights.  In In re The Free Lance-Star Publishing Co.

The Employee Retirement Income Security Act of 1974, as amended (“ERISA”), requires trustees of multiemployer pension and benefit funds to collect contributions required to be made by contributing employers under their collective bargaining agreements (“CBAs”) with the labor union sponsoring the plans. This is not always an easy task—often, an employer is an incorporated entity with limited assets or financial resources to satisfy its contractual obligations.