A recent decision from the United States Bankruptcy Court for the Western District of Texas caught our eye because of the unconventional opening line:

“Summers are hot in Texas, so pools are a hot item. But not hot enough to help a pool installer [ . . . ] avoid bankruptcy” – Judge Tony M. Davis, United States Bankruptcy Judge.

Practitioners that exclusively represent clients in large scale restructurings and chapter 11 reorganizations may be used to the debtor remaining in place with senior management continuing to oversee the day to day operations of the company and overseeing the debtor’s reorganization case.  It may seem strange then to such practitioners that, unlike in chapter 11 cases, the debtor in a chapter 7 case often has only a limited role in its own bankruptcy case after the initial debtor interview and the section 341 meeting of creditors.  In a chapter 7 case, a trustee is appointed and i

The scope of the Bankruptcy Code’s safe harbor for certain financial contracts has been tested again, this time in the United States Bankruptcy Court for the Western District of Louisiana. The question this time was whether an ipso facto provision continues to be safe harbored if enforcement of that provision is conditioned on other factors – in this case, the debtor’s failure to perform under the contract.

In In re Intervention Energy Holdings, LLC, the question before the United States Bankruptcy Court for the District of Delaware was whether an investor who “bought and paid for [one] Common Unit (including all rights related thereto),”

Addressing latent claims in bankruptcy cases has always been a challenge, and debtors are often left with uncertainty as to whether such claims have been discharged.  Although the legal standard for what constitutes a “claim” under the Bankruptcy Code in the Third Circuit has evolved to give debtors and potential claimants more clarity with respect to the treatment of latent claims, the uncertainty remains for plans confirmed prior to 2011.  A recent decision from the District of New Jersey, 

Under Section 363(f) of the Bankruptcy Code, a debtor or trustee can sell estate assets “free and clear of any interest” in such assets. This short, simple string of six words represents one of the most powerful tools in the bankruptcy professional’s arsenal.

The preparation and filing of a debtor’s schedules of assets and liabilities is a routine but important aspect of nearly every bankruptcy case. A debtor’s schedules provide critical information to creditors and other parties in interest, the Office of the United States Trustee, and the bankruptcy court.

Federal bankruptcy law can benefit debtors and creditors alike. Provisions such as the automatic stay and absolute priority ensure a streamlined proceeding, preserving the debtor’s scarce resources for business rehabilitation and creditor repayment.  The alternative, multiple state court debt enforcement actions, would waste the debtor’s time and money on litigation (as valuable as bankruptcy lawyers may be). 

Pursuant to a provision of the Bankruptcy Code familiar to readers of Weil’s Bankruptcy Blog (see our prior post, To Assume or Not to Assume, that Is the Question: What Act Constitutes “Assumption” Under Section 365(d)(4) of the Bankruptcy Code?), the United States District Court for the District of Delaware recently affirmed a bankruptcy c

The power of a debtor or trustee to avoid preferential transfers that benefit certain creditors over others is critical to achieving one of the primary tenets of the Bankruptcy Code – the equality of treatment among all creditors. This ability to recover preferences prevents a debtor from favoring certain creditors over others by transferring property in the time leading up to a bankruptcy filing. Although these preference powers are broad, they are restrained by certain conditions, including a minimum threshold on amounts that can be avoided.