In a highly anticipated decision, the U.S. Court of Appeals for the Fifth Circuit recently affirmed a bankruptcy court order dismissing a chapter 11 case filed by a corporation without obtaining—as required by its corporate charter—the consent of a preferred shareholder that was also controlled by a creditor of the corporation. In Franchise Services of North America, Inc. v. Macquarie Capital (USA), Inc. (In re Franchise Services of North America, Inc.), 891 F.3d 198 (5th Cir.

There is something positively Dickensian when looking at the anti-deprivation rule (the "rule") and images come up of scribes working in dark and dismal rooms scratching their quills by dim candle light. Indeed, the rule dates back to the nineteenth century and many lawyers would be hard-pressed to explain it even if they are able to grasp the contradictions and fine distinctions thrown up by the old cases. In essence, the rule provides that a contractual provision is void if it provides for the transfer of an asset from the owner to a third party upon the insolvency of the owner.

As a general rule, absent an express agreement to the contrary, expenses associated with administering the bankruptcy estate, including pledged assets, are not chargeable to a secured creditor’s collateral or claim but must be paid out of the estate’s unencumbered assets. Recognizing, however, that the bankruptcy estate may be called upon to bear significant expense in connection with preserving or disposing of encumbered assets as part of an overall reorganization (or liquidation) strategy, U.S.

The power to alter the relative priority of claims due to the misconduct of one creditor that causes injury to others is an important tool in the array of remedies available to a bankruptcy court in exercising its broad equitable powers. However, unlike provisions in the Bankruptcy Code that expressly authorize a bankruptcy trustee or chapter 11 debtor-in-possession (“DIP ”) to seek the imposition of equitable remedies, such as lien or transfer avoidance, the statutory authority for equitable subordination—section 510(c)—does not specify exactly who may seek subordination of a claim.

On March 15, 2007, with Jones Day’s assistance as bankruptcy counsel, FLYi, Inc. (“FLYi”), Independence Air, Inc. (“Independence”) and their affiliated debtors (collectively, the “Debtors”) obtained confirmation of their chapter 11 plan under the “cramdown” provisions of the Bankruptcy Code. The plan, which become effective on March 30, 2007, will distribute approximately $150 million to unsecured creditors. In ruling on confirmation of the plan, the U.S.

In Weisfelner v. Fund 1 (In re Lyondell Chem. Co.), 503 B.R. 348
(Bankr. S.D.N.Y. 2014), the U.S. Bankruptcy Court for the Southern
District of New York held that the “safe harbor” under section
546(e) of the Bankruptcy Code for settlement payments made
in connection with securities contracts does not preclude
claims brought by a chapter 11 plan litigation trustee on behalf
of creditors under state law to avoid as fraudulent transfers
pre-bankruptcy payments to shareholders in a leveraged buyout

The U.S. Court of Appeals for the Second Circuit recently held in Drawbridge Special Opportunities Fund LP v. Barnet (In re Barnet), 2013 BL 341634 (2d Cir. Dec. 11, 2013), that section 109(a) of the Bankruptcy Code, which requires a debtor "under this title" to have a domicile, a place of business, or property in the U.S., applies in cases under chapter 15 of the Bankruptcy Code.

Section 552(b)(2) of the Bankruptcy Code provides that if a creditor prior to bankruptcy obtained a security interest in rents paid to the debtor, that security interest extends to postpetition rents to the extent provided in the security agreement. Courts have disagreed, however, on the question of whether the debtor must provide adequate protection with respect to such postpetition rents. The resolution of this issue typically determines whether the debtor may use a portion of the postpetition rents that it receives to fund the administrative costs of its bankruptcy.

Europe has struggled mightily during the last several years to triage a long series of critical blows to the economies of the 27 countries that comprise the European Union, as well as the

collective viability of eurozone economies. Here we provide a snapshot of some recent developments relating to insolvency and restructuring in the EU.

Europe has struggled mightily during the last several years to triage a long series of critical blows to the economies of the 27 countries that comprise the European Union, as well as the collective viability of eurozone economies. Here we provide a snapshot of some recent developments relating to insolvency and restructuring in the EU.