Creation of the Bankruptcy Estate  

Preservation of favorable tax attributes, such as net operating losses that might otherwise be forfeited under applicable nonbankruptcy law, is an important component of a business debtor's chapter 11 strategy. However, if the principal purpose of a chapter 11 plan is to avoid paying taxes, rather than to effect a reorganization or the orderly liquidation of the debtor, the Bankruptcy Code contains a number of tools that can be wielded to thwart confirmation of the plan.

Receiverships are becoming a popular tool for creditors to manage distressed real estate and to realize upon their collateral. Lenders are looking at receiverships as a faster and more efficient and cost effective strategy than forcing a debtor into bankruptcy. They offer the lender flexibility as opposed to well established procedures under bankruptcy. The current economy is also resulting in increased use of receiverships to complete unfinished buildings.  

On August 12, 2010, Caribbean Petroleum Corporation filed petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware. Caribbean Petroleum imports and distributes petroleum products in Puerto Rico through a network of 184 service stations. This post will look at the events leading up to the company's filing for bankruptcy, as well as what the company hopes to accomplish while in bankruptcy.

Introduction

Two decades ago, the Supreme Court tackled the issue of whether a third party had submitted itself to jurisdiction of the bankruptcy court. In Granfinanciera, S.A. v. Nordberg,1 the Supreme Court ruled that a party who has not filed a claim against a bankrupt's estate is not subject to the jurisdiction of the bankruptcy courts. A year later, in Langenkamp v.

The United States Bankruptcy Court for the District of Delaware recently denied the appointment of an examiner in U.S. Bank National Association v. Wilmington Trust Co. (In re Spansion, Inc.),1 despite the requirement in section 1104(c) of the Bankruptcy Code that the Court "shall" appoint an examiner in certain circumstances. In making this decision, Chief Bankruptcy Judge Kevin J.

In Marathon Petroleum Co. v. Cohen (In re Delco Oil Co.),1 the Court of Appeals for the Eleventh Circuit recently held that a trustee could avoid a debtor's post-petition transfers of funds that were cash collateral, notwithstanding that the payments had been made in good faith and in the ordinary course of business.

Introduction

The Court of Appeals for the Fifth Circuit recently held that Chapter 15 of the Bankruptcy Code does not prohibit a foreign representative from bringing an avoidance action so long as the claim for relief is based on the substantive laws of the jurisdiction where the foreign proceeding is located. The Fifth Circuit’s decision is consistent with the dual policy considerations of comity and predictability. Fogerty v. Petroquest Res., Inc. (In re Condor Ins. Ltd.), 601 F.3d 319 (5th Cir. 2010).

Background