A theme running through many apparent-authority cases is the question of who loses: for example, the LLC whose property was used to secure unauthorized, personal borrowings by a member or manager, or the bank that in good faith made the loan to the malefactor? Often the recipient of the funds has used the money for personal matters and is essentially judgment proof.

On June 28, 2011, the Court of Appeals for the Seventh Circuit rejected the views of the Third Circuit and the Fifth Circuit and held that a reorganization plan which proposes the sale of encumbered assets free and clear of liens must honor the secured creditor’s right to credit bid its claim in order to be confirmed under the “fair and equitable” standard of the Bankruptcy Code. In the combined appeals of In re River Road Hotel Partners, LLC, et al. andIn re Radlax Gateway Hotel, LLC, et al.

On June 28, 2011, the U.S. Court of Appeals for the Seventh Circuit held that secured creditors have a statutory right to credit bid1 their debt at an asset sale conducted under a "cramdown" plan. In re River Road Hotel Partners, LLC, ___ F.3d. ___, 2011 WL 2547615 (7th Cir. June 28, 2011).2 The Seventh Circuit's decision creates a split with recent decisions in the Third and Fifth Circuits regarding a lender's ability to credit bid its secured debt. See In re Philadelphia Newspapers, 599 F.3d 298 (3d Cir. 2010); In re Pacific Lumber, Co., 584 F.3d 229 (5th Cir.

The Fifth Circuit Court of Appeals has affirmed decisions of the bankruptcy court and a federal district court that the purchaser of a bankrupt company’s assets cannot recover the costs of environmental remediation from an escrow account established as part of the purchase agreement.In re Evans Indus. Inc., No. 10-30387 (5th Cir. 6/21/11) (unpublished).

An undersecured creditor (“C”) intending to credit bid at a sale of the debtor’s unencumbered property must give “notice” of its intent to the bankruptcy trustee, held the U.S. Court of Appeals for the Fifth Circuit on April 23, 2015. In re R.L. Adkins Corp., 2015 WL 1873137 (5th Cir. April 23, 2015). Affirming the bankruptcy and district courts’ denials of C’s belated request, the Fifth Circuit held that C “failed to exercise” its right to credit bid at a sale of its collateral.

The recent Fifth Circuit decision in Janvey v. The Golf Channel, Inc. ("Golf Channel") reminds us again that sometimes, despite our best efforts, bad things happen to good people.  In that case, the Golf Channel learned a painful lesson arising out of its innocent involvement with Stanford International Bank, Ltd. 

Prior to the enactment of the Bankruptcy Code in 1978, the Fifth Circuit took a stringent approach to the payment of attorney’s fees – holding that public policy supported restricting attorney compensation in bankruptcy cases and that attorneys should not expect to receive the same compensation as if working for a non-bankrupt concern.  Congress enacted 

How would you like to be paid only for work which, in hindsight, unquestionably resulted in a material benefit to your employer? That unsuccessful sales call? Freebie. That account you spent hours trying to collect, but ultimately had to write off? That’s on your time. Thanks. Well, bankruptcy lawyers wouldn’t like that compensation arrangement any more than you. And on April 9, 2015, the Fifth Circuit issued an important opinion in Woerner v.

When a debtor pays the market cost for goods and services provided to it by third-party vendors, these payments normally cannot be recovered as fraudulent transfers in the U.S. That is because the debtor receives reasonably equivalent value for the payments to its vendors and because the unsuspecting vendors can assert a good faith defense based on the value provided.

Baker Botts L.L.P. et al. v. ASARCO L.L.C., currently pending before the Supreme Court of the United States, is of particular interest to bankruptcy practitioners because this decision will have far-reaching effects regarding attorney’s fees in bankruptcy.  Specifically, the Supreme Court will determine whether Section 330(a) of the Bankruptcy Code grants bankruptcy judges the discretion to award compensation for the defense of fee applications.