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.
The bankruptcy process is often long and arduous for clients, whether debtor or creditor, and their counsel. Bankruptcy courts feel the pain, too. So, when we finally reach the glorious goal of plan confirmation, most revel in the conclusion of the plan process. Though often considered anathema, appeals of plan confirmation orders are sometimes pursued. Recognizing the public policy desire for finality in bankruptcy proceedings, the Eighth Circuit applies the “person-aggrieved” doctrine in determining whether an appellant has standing to appeal a plan confirmation or
In the latest decision to emanate from the Madoff bankruptcy, the United States District Court for the Southern District of New York denied the appeal of a protective order that relieved Irving Picard—the court-appointed trustee—from answering discovery requests regarding his compensation arrangement with his law firm.
One of the more appealing aspects of the U.S. bankruptcy process is the relative ease in which parties in interest may file proofs of claim. In years passed all it took was to mail in a simple form to the bankruptcy court or claims agent and now it is even easier with the advent of email and electronic claims uploading. This relatively easy process, however, often comes with a plethora of invalid or unenforceable proofs of claim.
In the latest ruling in the long-running dispute in Sentinel Management’s bankruptcy case, the Seventh Circuit recently held that a bank employee’s suspicions about the source of the bank’s collateral should have put the bank on inquiry notice, thus precluding the bank from asserting a “good faith” defense to a fraudulent transfer claim that a liquidating trustee brought against the bank.