Trillions of dollars of securities are issued on the strength of bankruptcy remoteness and special purpose entities (“SPVs”) intended to be bankruptcy remote. These transactions generally involve hundreds of millions of dollars and investors’ expectations that the SPVs will not be dragged into a potential bankruptcy filing of their non-SPV affiliates.

In a recent opinion from the Delaware Bankruptcy Court in the Dura Automotive Systems bankruptcy case,[1] Judge Karen Owens held that executory contracts cannot be impliedly assumed through course of conduct by the parties, under binding Third Circuit precedent, notwithstanding that a minority of courts outside of the Third Circuit have allowed it

Welcome to the next edition of the insolvency insight bulletin from the insolvency specialists at Quadrant Chambers. All cases link to the relevant judgments.

Legislation

In In re KarcreditLLC [1], the U.S. Bankruptcy Court for the Western District of Louisiana was faced with two lenders with claims to one original stock certificate as collateral.

1. Before using the Online Bankruptcy Portal

The consequences of bankruptcy are serious, and a bankruptcy cannot be cancelled if you change your mind.

Before filing any documentation with the Australian Financial Security Authority (AFSA), seek advice from an insolvency lawyer. An insolvency lawyer will be able to provide you advice on your rights and obligations throughout the bankruptcy process.

2. Create an Account

With more than $1.7 trillion in student loan debt outstanding in the United States, student loan borrowers sometimes try to turn to the bankruptcy courts for relief, often without success due to the fact that most student loans are presumed to be nondischargeable.[1] In its July 15, 2021 decision in In re Homaidan,

On July 8, 2021, Pipeline Foods, LLC, along with several affiliates, which operate a Minnesota-based organic food supply chain company, filed a petition under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware (Case No. 21-11002). The company estimates $100 to $500 million in assets and liabilities.

On July 2, 2021, Something Sweet, Inc., a New Haven, Connecticut-based bakery that “provides high quality pies and cakes to the largest retailers in the country,” filed a petition under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware (Case No. 21-10993). The company estimates $10 to $50 million in assets and liabilities.

In a previous article, I discussed the potential impacts of a then-forthcoming decision in the case of In re United Cannabis Corporation, which had the potential to widen access to federal bankruptcy relief to cannabis-adjacent hemp businesses.

Late on July 6, 2021, MatlinPatterson Global Opportunities Partners II L.P., along with several affiliates, filed a petition under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the Southern District of New York (Lead Case No. 21-11255).