When your customer is in bankruptcy, there are two major no-nos that you must remember.

First, don't violate the automatic stay, which prevents a creditor from attempting to collect a debt while the debtor is in bankruptcy unless the creditor gets prior court approval. Second, don't violate the discharge injunction, which absolves a debtor of liability for those debts covered by the bankruptcy court's discharge order. The automatic stay takes effect when the debtor files bankruptcy, while the discharge injunction typically comes at the end of the case.

Delaware Bankruptcy Judge Brendan Shannon granted mechanic’s lien claimants $1.6 million for making a substantial contribution in a case by “demonstrably and materially facilitating the process of reorganization.” In re M & G USA Corp., No. 17-12307, 2019 Bankr. LEXIS 1398 (Bankr. D. Del.

In Travelers Cas. & Sur. Co. of Am. v. PG&E, 549 U.S. 443 (2007), the Supreme Court held that bankruptcy law does not disallow a post-petition unsecured claim for attorney’s fees to the extent such claim is authorized by a pre-petition contract and not otherwise expressly disallowed. That pronouncement should have stopped all future litigation over the issue. That has not been the case.

Under title 11 of the United States Code (the “Bankruptcy Code”), generally speaking, payments by insolvent debtors to an unsecured or undersecured creditor on pre-existing indebtedness (so-called “antecedent debt”) made during the 90-day period before the debtor’s bankruptcy filing (the “Preference Period”) are vulnerable to claw-back in the debtor’s bankruptcy case as voidable preferences.

View original on Law360: https://www.law360.com/articles/1173110/the-upside-of-the-fastest-chapter-11-confirmation-ever

In response to the Federal Energy Regulatory Commission (“FERC”), the U.S. Bankruptcy Court for the Northern District of California held that the rejection of wholesale power purchase agreements “is solely within the power of the bankruptcy court, a core matter exclusively this court’s responsibility.” [1]

Lenders and their counsel know that it is important to properly describe the collateral on which a lien (mortgage or security interest) is being granted. The purpose of this post is to discuss some recent decisions contrary to what many corporate counsel thought they knew concerning collateral descriptions in security agreements and UCC financing statements.

On May 20, 2019, the US Supreme Court clarified that when a trademark licensor rejects a trademark license agreement in a Chapter 11 bankruptcy proceeding, the rejection does not rescind the use rights of the licensee under the license agreement. The decision resolved a circuit split on this issue between the First and Seventh Circuits. The Court held that the licensor’s rejection of the license agreement in bankruptcy has the same effect on the licensee’s rights as a licensor’s breach of the license agreement outside of bankruptcy.

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Buyers and sellers of contaminated properties will want to take note of the June 3, 2019 ruling from the U.S. Bankruptcy Court for the Northern District of New York. In a 14-page opinion, Judge Cangilos-Ruiz ruled that neither a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) § 104(e) information request nor a National Priority Listing regarding a polychlorinated biphenyl (PCB)-contaminated section of the Black River constitute “claims” under New York law.