Creditors often think that an involuntary bankruptcy petition is a great bargaining chip when faced with a recalcitrant debtor. However, the actual filing of an involuntary bankruptcy petition (when that petition is filed in “bad faith”) confers a considerable risk to the petitioning creditors. Recently, the United States Court of Appeals for the Third Circuit issued an opinion that re-emphasizes just how risky bad faith involuntary petitions can be for creditors.

The reality of a bankruptcy proceeding is that creditors often receive less than a full distribution on their claims, forcing them to absorb such losses or look for new avenues to make themselves whole. The “bankruptcy haircut” is more often the case for general unsecured creditors and occurs less often for secured creditors (when they are not undersecured) and lessors (when they are not underwater on their lease). Sometimes creditors have the luxury of looking to guarantors to mitigate their losses when the guarantors are not insolvent or otherwise judgment proof.

Section 365 of the Bankruptcy Code provides that a debtor “subject to the court’s approval, may assume or reject any executory contract or unexpired lease of the debtor.” 11 U.S.C. § 365. This provision is a powerful tool because it allows a chapter 11 debtor to assume agreements that will be beneficial to restructuring efforts while rejecting agreements that are burdensome. Given its importance, the application of section 365 is not without challenge and subject to interpretation.

The Walking Company Holdings, a Santa Barbara, CA-based designer, manufacturer and retailer of comfort footwear and casual apparel, has, along with its wholly owned subsidiaries The Walking Company, Big Dog USA, Inc. and FootSmart, Inc., filed

On January 12, 2018, an involuntary chapter 11 petition was filed against Oak HRC New Castle, LLC, a rehabilitation facility located in Wilmington, Delaware, and health care business (as defined in 11 U.S.C. 101(27A)). The petitioners, each asserting trade claims, are: Healthcare Services Group, Inc.

In order to secure a real property owner’s payment obligation, contractors, mechanics, materialmen, and other workmen are often granted a lien referred to by a variety of names including, materialmen’s liens, workmen’s liens, and mechanic’s liens. While the parlance varies by jurisdiction, they are generally referred to as mechanic’s liens in Texas—even in the context of real property.

Short Summary

Keystone Tube Company, LLC and four affiliates, including A.M. Castle & Co. (OTC: CASL), HY-Alloy Steels Company, Keystone Service, Inc. and Total Plastics, Inc., have filed chapter 11 petitions before the United States Bankruptcy Court for the District of Delaware (Lead Case No. 17-11330). The debtors are a specialty metals distribution company.

On March 23, 2017, the U.S. Bankruptcy Court for the Southern District of Florida (the “Court”) issued an opinion in the chapter 15 case of Banco Cruzeiro do Sul, S.A., a Brazilian bank (“BCSUL” or the “Debtor”), holding, among other things, that section 1521(a)(7) of the Bankruptcy Code does not prevent foreign representatives from commencing state law fraudulent conveyance actions. See Laspro Consultores LTDA v. Alinia Corp. (In re Massa Falida Do Banco Cruzeiro Do Sul S.A.), No. 14-22974-BKC-LMI, Adv. Pro. No. 16-01315-LMI, 2017 WL 1102814 (Bankr. S.D. Fla.

NJOY, Inc., an e-cigarette and vaping company headquartered in Scottsdale, Arizona, has filed for chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware (Case No. 16-12076).