The ability to assume or reject executory contracts is one of the primary tools used by debtors in a Chapter 11 reorganization. Where a debtor has a contract with a third party that is “executory”—meaning that ongoing performance obligations remain for both the debtor and the contract counterparty on the date of the bankruptcy filing—the debtor can choose to either assume or reject the contract under 11 USC § 365.
On June 9, 2021, East Greenwich, R.I.-based jewelry company Alex and Ani, LLC filed a petition under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware along with several affiliates. The lowest filed case number is 21-10917 (A and A Shareholding, Co., LLC). The company estimates $100 million to $500 million in both assets and liabilities.
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Introduction
Under Singapore bankruptcy law, when a person is adjudged bankrupt, any disposition of property made by him from the date of the bankruptcy application is void unless the court consents to or ratifies the disposition. However, will the court ratify the disposition of assets made pursuant to an order for division of assets in divorce proceedings, and in what circumstances will it do so? These were the issues considered in the Singapore High Court case of Ong Dan Tze Magdalene v Chee Yoh Chuang & Anor [2021] SGHC 129.
The Bottom Line:
Breaking with the Third Circuit and the Fifth Circuit, on June 28, 2011, the Seventh Circuit held that a debtor's plan of reorganization that provides for the sale of the debtor's assets free and clear of an existing security interest may only be confirmed over the objection of its secured creditor if the plan's sale procedure permits the secured creditor to credit bid its secured debt for the assets being sold. River Road Hotel Partners, LLC v. Amalgamated Bank, -- F.3d --, Nos. 10-3597 & 10-3598 (7th Cir. June 28, 2011).
On June 14, 2011, the Pension Benefit Guaranty Corporation (PBGC) published its final rule on the termination of an underfunded pension plan when the sponsor is in bankruptcy. The final rule is substantially the same as the proposed rule published in 2008. The Pension Protection Act of 2006 (PPA) amended the rules for a single-employer pension plan termination when the contributing sponsor is in bankruptcy.
TOWNSQUARE MEDIA v. BRILL (July 21, 2011)
While some fans of the Cleveland Indians have long complained about the frugality of owner Paul Dolan, at least Mr. Dolan has never had trouble making payroll. In perhaps the biggest event to occur off the field since Walter O'Malley moved the team from Brooklyn, the Los Angeles Dodgers filed for chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware on June 27, 2011.
One consequence of the depressed real estate market has been numerous Chapter 11 bankruptcy cases wherein the debtor seeks confirmation of a “dirt-for-debt” plan. In such a plan, instead of paying the secured creditor the value of the real property securing the debt through restructured loan terms, the debtor proposes to convey part or all of the real property securing the debt to the creditor in full satisfaction of its secured claim.