There is nothing more frustrating to a creditor than finally getting paid for goods or services, only to have a customer file for bankruptcy protection and, as a result, ending up on the receiving end of a bankruptcy preference action.
A creditor who settles with a debtor during a bankruptcy case must be sure to continue following the case during the plan stage, or risk the plan affecting the creditor’s rights against third parties. Iberiabank learned that lesson the hard way, after a plan was confirmed in the chapter 11 case of FFS Data, Inc.
When an oversecured creditor forecloses on a debtor’s property after the automatic stay has been lifted, does the Bankruptcy Code (as opposed to state law) govern recovery of attorney’s fees and other amounts from the sale proceeds? Does the bankruptcy court have jurisdiction over the distribution of such proceeds? In Goldsby v.
When a bank holding company files a chapter 11 case, a key factor to the success of the case will be whether the debtor previously made any commitment to a federal depository institution regulatory agency, such as the FDIC, to maintain the capital of the debtor’s bank subsidiary. This is because section 365(o) of the Bankruptcy Code provides that the debtor is deemed to have assumed such obligations, and any claim for subsequent breach of these obligations is entitled to priority under section 507(a)(9) of the Bankruptcy Code. The FDIC often demands
On June 27, 2014, the Fourth Circuit issued its second opinion in the National Heritage Foundation, Inc.
One of the most dramatic tools a lender can use in the collection of a loan is the involuntary bankruptcy case. It is dramatic because of the implications for both the debtor and the lender who files the case.
As most astute manufacturers know, there is a statutory right under Bankruptcy Code section 503(b)(9) to assert an administrative priority claim (one with the highest priority in payment after secured creditors) for goods delivered to a debtor within 20 days before the debtor commences a bankruptcy case. There are, however, other laws that should be considered when dealing with foreign commercial transactions as illustrated in a recent decision by the Bankruptcy Court in the Eastern District of Pennsylvania in the case of In re World Imports, Ltd. (No. 13-15929 SR).
The United States Supreme Court, on July 1, 2014, granted a petition for certiorari in an important Seventh Circuit case limiting the power of bankruptcy courts to decide property disputes. Wellness International Network, Ltd. et al. v. Sharif, 727 F.3d 751 (7th Cir. 2013). The Seventh Circuit had held last year that the bankruptcy court lacked the constitutional authority to determine whether purported trust assets were property of the debtor’s estate.
The filing of a bankruptcy petition creates a bankruptcy estate that includes “all legal or equitable interests of the debtor in property as of the commencement of the case.” Highland Capital Mgmt. LP v. Chesapeake Energy Corp. (In re Seven Seas Petroleum, Inc.), 522 F.3d 575, 584 (5th Cir. 2008) (quoting 11 U.S.C. § 541(a)(1)). This includes “rights of action such as claims based on state or federal law.” Id.