Secured creditors naturally want to be repaid. Sometimes secured creditors go as far as asking a debtor to waive its right to seek bankruptcy protection. Although such clauses are frequently held to be unenforceable, we previously have discussed exceptions for LLCs.

“…to be my student, you must develop a taste for victory.”

 Pai Mei, Kill Bill

A debtor’s prepetition causes of action and other legal interests typically become property of the debtor’s estate under section 541 of the Bankruptcy Code. In a chapter 11 case, this often leaves the trustee (or debtor in possession) with the sole authority to pursue – or not pursue – such causes of action postpetition. Although the trustee is generally required to maximize the value of the estate, situations can arise where a trustee refuses to pursue litigation that is otherwise in the estate’s best interest.

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 

Under section 365(d)(4) of the Bankruptcy Code, an unexpired lease of nonresidential real property is automatically deemed rejected if a debtor-lessee does not assume such lease within 120 days of its bankruptcy filing, or within 210 days with court permission.

Trying to discharge your personal debts?  Well, here is a new method: in 

Although likely not the intent of In re Siag Aerisyn, LLC, a recent decision from the United States Bankruptcy Court for the Eastern District of Tennessee Southern Division, some might argue that the opinion serves as a how-to guide for masking a capital contribution by an affiliate as a loan constituting bona fide debt.

INTRODUCTION

In post-confirmation proceedings, bankruptcy courts maintain the ability to clarify a plan where silent or ambiguous, and interpret a plan to advance equitable considerations.  However, bankruptcy courts are not allowed to modify a plan outside the confines of section

Should a membership agreement governing a debtor’s interest in an LLC be treated as property of the estate or an executory contract? Equally, should a debtor’s economic and non-economic interests in an LLC be treated as property or a contractual right? Can’t make up your mind? Don’t worry—the bankruptcy courts can’t either.