Section 546(e) of the Bankruptcy Code's "safe harbor" preventing avoidance in bankruptcy of certain securities, commodity, or forward-contract payments has long been a magnet for controversy. Several noteworthy court rulings have been issued in bankruptcy cases addressing the scope of the provision, including its limitation to transactions involving "financial institutions" as transferors or transferees, its preemption of avoidance litigation that could have been commenced by or on behalf of creditors under applicable non-bankruptcy law, and its application to non-public transactions.

In early 2024, Switzerland's GDP continued a moderate growth, mostly due to the service economy. Most conjunctural indicators have stabilised in recent months.The Swiss federal government's Expert Group on Economic Forecasts therefore expects, in its latest forecast, growth for the Swiss economy in 2024 to be similar to 2023; i.e., a GDP growth rate of 1.2%, which is still significantly under average.

A look back at bankruptcy trends and litigation in 2023 reveals a spike in bankruptcy filings driven by economic factors and fallout from the pandemic while in upper courts several interesting cases were decided involving proofs of claim, stay violations, and discharge issues.

Bankruptcies with large tort claims are common:

• some involve a limited number of claimants (e.g., a drunk driver hits a bus or a restaurant serves bad food one evening); and
• others have large numbers of claimants, some of whom won’t even be known for at least another decade (e.g., asbestos cases).

Often in tort bankruptcies, the total amount of claims overwhelms the debtor’s ability to pay: i.e., existing assets, insurance coverages and projected future income streams are, simply, insufficient.

You don’t see this very often: a dispute over the confidentiality of mediation communications.

But such a dispute recently happened in In re Barretts Minerals, Inc., Case No. 23-90794, Southern Texas Bankruptcy Court. And the result is this: mediation confidentiality remains alive and well.

In re Barretts Minerals is a mass-tort asbestos case. And Debtor is pursuing confirmation of a bankruptcy plan under § 524(6). Mediation efforts are in progress.

The existence of a bankruptcy option is a good thing for any debtor-creditor situation that is highly stressed—whether the bankruptcy option is used or not.

This is especially true in mass-tort cases where a potential exists for (i) hugely-disparate results for similarly situated plaintiffs, and (ii) debilitating delays in the progress of litigation.

We have previouslyblogged about the section 546(e) defense to a trustee’s avoidance powers under the Bankruptcy Code. A trustee has broad powers to set aside certain transfers made by debtors before bankruptcy. See 11 U.S.C. §§ 544, 547, 548.

In 2019, Congress enacted the Small Business Reorganization Act, which created subchapter V within chapter 11 of the Bankruptcy Code. Congress’ intent was to create a more cost-efficient and streamlined restructuring process for small businesses by modifying certain provisions of chapter 11 for debtors with claims below a specific debt cap. In particular, because creditors typically have smaller claims against these small businesses, the new subchapter takes into account the likelihood that there will be no or minimal meaningful creditor participation.

Over the years, I’ve heard lots of people say, “Bankruptcy abuse is a huge problem,” as a self-evident and undeniable proposition.

But here’s the thing. Debtors who try to abuse the bankruptcy system rarely get away with it. That’s because there are too many gatekeepers—and no debtor can fool them all!

The gatekeepers are debtor’s counsel, creditors and their attorneys, U.S. Trustees, bankruptcy courts, and appellate courts.

In the recent decision of Paragon Offshore, No. 16-10386 (CSS), 2021 (Bankr. D. Del. June 28, 2021), the U.S. Bankruptcy Court for the District of Delaware (the court) addressed the issue of whether the Office of the United States Trustee (OUST) could collect its quarterly fees against assets that were previously transferred to a litigation trust (the litigation trust) free and clear of any and all claims, liens and other encumbrances pursuant to a confirmed plan of liquidation.