In June, 2012, Stockton California filed a bankruptcy case under chapter 9.  While businesses and individuals are entitled to file bankruptcy petitions without bankruptcy court approval, the same is not true for municipalities.  They can only be debtors if, among other things, the majority of their creditors agree; they negotiate in good faith and fail to obtain majority agreement; negotiation is impracticable; or a creditor is attempting to obtain a voidable preference.  In addition, the bankruptcy court can dismiss a municipality’s petition if it was not filed in “good fait

The homestead exemption is important to the many debtors in bankruptcy who own their own homes. But what if the debtor owns the home through his or her single-member LLC? Is that good enough? A Bankruptcy Appellate Panel recently said no, ruling that a debtor whose home was owned by her single-member LLC could not take advantage of the homestead exemption. In re Breece, No. 12-8018, 2013 WL 197399 (B.A.P. 6th Cir. Jan. 18, 2013).

Despite the increasing prominence of pre-packaged or pre-negotiated chapter 11 cases in recent years, not every bankruptcy filing by or against a company is a carefully planned event orchestrated over a period of months or even years to achieve a workable reorganization, sale, or liquidation strategy. Sometimes, unanticipated circumstances precipitate a bankruptcy filing.

Last Fall, the United States Court of Appeals for the Second Circuit issued a decision in the Charter Communications bankruptcy case which will create additional significant challenges for those seeking to appeal confirmation of plans of reorganization that have been implemented. See 691 F.3d 476. Upon implementation (or “substantial consummation”) of the plan, the Second Circuit presumes that the appeal of such plan is equitably moot. Appellants bear the burden of overcoming that presumption.

When does the selection of a technically correct venue become “unjust”? This was the core question Judge Shelley Chapman was required to grapple with when Patriot Coal and almost 100 of its affiliates filed for bankruptcy in New York this past summer. Should it matter that Patriot Coal created the New York subsidiaries, that permitted a New York court filing, about a month prior to the actual bankruptcy filing?

Those who practice in the secured transactions arena, and our clients, understand the importance of filing financing statements and continuing them on a regular basis. Failure to maintain perfection of a security interest can be disastrous to a secured lender in the case of a bankruptcy case involving its borrower. Financing statements can, however, sometimes be mistakenly terminated. Two recent cases illustrate the issues which may arise when a financing statement is inadvertently terminated.

Automotive sales in North America continue to climb, and many suppliers are prospering. However, there are some companies who are struggling and who may face bankruptcy. We have seen companies such as A123 Systems and certain subsidiaries of Revstone Industries recently file for protection under the Bankruptcy Code. How can a supplier to a troubled company protect itself? Must a supplier continue to supply on credit terms? The Uniform Commercial Code may assist such a supplier in this situation.

The bankruptcy of the largest U.S. city to file a chapter 9 bankruptcy petition has yielded a decision with serious implications for municipal creditors. Specifically, the United States Bankruptcy Court for the Eastern District of California overruled the objections asserted by retired employees of the City of Stockton, California and authorized the City to suspend the retiree’s health benefits during the City’s Chapter 9 case. Ass’n of Retired Employees of the City of Stockton, et al. v. City of Stockton, California (In re City of Stockton), 56 Bankr.Ct.Dec. 250 (Bankr. E.D.

On Wednesday, March 13, 2013, the Executive Office for United States Trustees (“EOUST”) released its long-awaited final rules for pre-bankruptcy counseling and post-filing debtor education.  The regulations update procedures and criteria United States Trustees (“USTs”) shall use when determining whether applicants seeking to become and remain approved as:  (1) nonprofit budget and credit counseling agencies (“credit counseling agencies” or “agencies”) (the “

The Senate Judiciary Committee in February approved Delaware Democratic Senator Chris Coons to head the Subcommittee on Bankruptcy and the Courts for the 113th Congress. This gives Coons oversight of the nation’s bankruptcy court system, as well as court administration and management, judicial rules and procedures, the creation of new courts and judgeships, and legal reform and liability issues.