To paraphrase Samuel Johnson, publication notice is, quite often, the debtor’s “last refuge.” Yet it is frequently a necessary feature of the notices provided in bankruptcy cases. Debtors rarely possess an accurate method for notifying the many unidentifiable potential claimants. And so enters publication notice. Pursuant to well-settled law, publication notice – if sufficient – may satisfy the requirement to provide due process to unknown creditors in a bankruptcy proceeding.
In a case that was converted from a chapter 11 reorganization to a chapter 7 liquidation, the debtor sought an order directing the trustee to abandon certain real estate, arguing that there was no equity for the bankruptcy estate. A lender had already obtained relief from the automatic stay permitting it to foreclose on the property, and the debtor wanted to do a short sale with the consent of the lender. The chapter 7 trustee opposed the motion.
In its Scantling opinion, the Eleventh Circuit held that a Chapter 20 debtor (a chapter 13 debtor who previously filed and concluded a chapter 7 case) could strip off valueless junior liens on her principal residence even thought she was ineligible for a discharge in the chapter 13 case. Full disclosure: our firm, Berger Singerman, represented the appellee, Ms. Scantling.
On August 26, 2014, the Honorable Robert D. Drain, Bankruptcy Judge of the United States Bankruptcy Court for the Southern District of New York, issued several bench rulings (the “Bench Rulings”) in connection with confirmation of a plan of reorganization in the chapter 11 cases of MPM Silicones, LLC, et al.
On August 26, 2014, the Ninth Circuit Court of Appeals held that Wells Fargo (the “Bank”) did not violate the automatic stay by placing a temporary administrative hold on a chapter 7 debtor’s bank accounts. See In re Mwangi, 2014 WL 4194057 (9th Cir. 2014). Holland & Hart represented the Bank in this significant victory.
In re 2408 W. Kennedy, LLC, 512 B.R. 708 (Bankr. M.D. Fla. 2014) –
A commercial landlord sought relief from the automatic stay so that it could complete prepetition eviction proceedings against the debtor. The debtor objected, arguing that it had a right to assume the lease. The case turned on whether the landlord effectively terminated the lease prepetition.
The intersection of bankruptcy law and intellectual property law is not a very nice neighborhood. Anyone dealing with intellectual property license agreements must think about how these agreements are affected if one party to the agreement becomes insolvent. Below are strategies to help parties draft license agreements that will pass through this intersection relatively safely.
Bankruptcy Concepts
Proofs of claim filed against a debtor can be as varied as the claimants themselves. Everything from hand-written notes to hundreds of pages of sophisticated corporate documents has been submitted in support of claims. Matters become even more complicated when the claimant is a foreigner relying on foreign law and foreign language documents. In
Section 524 of the United States Bankruptcy Code (the Code) describes the effect of a discharge of a debtor, and in section 524(e), provides that a discharge of a debtor does not affect the liability of any other entity for the debtor's obligations. Today, virtually every plan of reorganization or liquidation includes releases for officers, directors and employees of the debtor, affiliates of the debtor, debtor and committee counsel involved in the case, the members of the creditors committee and plan sponsors, among others.
Some of our readers may have had the pleasure of renting a resort villa during their summer vacation (electronic postcards of such fancy digs are always welcome at the Weil Bankruptcy Blog, especially if you pose for a photo where you are reading one of our entries!). For the uninitiated (including yours truly), villas are often viewed as the ultimate upgrade for privacy and convenience when staying at a large resort for a week or more—a private home with the luxuries of a full service hotel.