In a unanimous decision arising out of the Tribune Media Company bankruptcy cases, a panel of the Second Circuit held that the safe harbor under section 546(e) of the Bankruptcy Code, which precludes avoidance of certain transfers by a

Landlords dealing with troubled tenants often enter into termination agreements that dictate terms for the consensual terminations of unexpired leases. Among other benefits, such termination agreements provide certainty and allow landlords to move on from unprofitable tenant relationships. Additionally, by entering into termination agreements, troubled tenants can be prevented from later assuming or assigning such terminated leases to an undesirable third-party if the tenant later files for bankruptcy.

Your business receives payment for goods or services that your business provided to a customer (“XYZ Inc.”). Your business is paid from the customer’s corporate account. You know that the payment came from XYZ Inc.’s corporate account because the check or credit card used for payment is in the name of XYZ Inc. However, three years later, you receive a letter from the “trustee” of XYZ Inc., now a debtor in bankruptcy, demanding payment of the money your business received for having provided goods or services to XYZ Inc.

The crash in oil prices has reverberated throughout the industry and is widely expected to lead to a wave of bankruptcies among oil and gas producers (particularly the small to midsize companies that have played a major role in the boom in shale production in North America). Less well recognized, until recently, is the prospect that these producer bankruptcies may soon affect oil pipeline companies that built new infrastructure, relying on long-term ship-or-pay contracts with the producers.

On March 29, 2016, the Second Circuit addressed the breadth and application of the Bankruptcy Code's safe harbor provisions in an opinion that applied to two cases before it.  The court analyzed whether: (i) the Bankruptcy Code's safe harbor provisions preempt individual creditors' state law fraudulent conveyance claims; and (ii) the automatic stay bars creditors from asserting such claims while the trustee is actively pursuing similar claims under the Bankruptcy Code.  In In re Tribune Co.

As we previously reported here at the Weil Bankruptcy Blog, in Burberry Limited and Burberry USA v.

As discussed in an earlier post called “Going Up: Bankruptcy Code Dollar Amounts Will Increase On April 1, 2016,” various dollar amounts in the Bankruptcy Code and related statutory provisions were increased for cases filed on or after today, April 1, 2016.

The Seventh Circuit Court of Appeals recently handed down a decision with significant implications for landlords contemplating lease termination agreements with distressed tenants. Ruling on a direct appeal in the chapter 11 case In re Great Lakes Quick Lube LP, the court held that a lease termination agreement between a landlord and a financially distressed tenant can be voided as either a fraudulent conveyance or a preferential transfer in the tenant’s subsequent bankruptcy case.

A Chapter 11 debtor’s pre-bankruptcy “surrender of [two] … leases to [its landlord] could be regarded as a preferential transfer,” held the U.S. Court of Appeals for the Seventh Circuit on March 11, 2016. In re Great Lakes Quick Lube LP, 2016 WL 930298, at *2 (7th Cir. March 11, 2016).

In a case of first impression, the Seventh Circuit recently issued an opinion that may cause landlords and their advisors to re-evaluate the consequences of terminating a financially distressed commercial tenant’s lease prior to bankruptcy. Official Comm. of Unsecured Creditors of Great Lakes Quick Lube LP v. T.D. Investments I, LLP (In re Great Lakes Quick Lube LP), --- F.3d ---, 2016 WL 930298 (7th Cir. Mar. 11, 2016) (Posner, J.).