In a case of first impression in Texas, the United States Bankruptcy Court for the Southern District of Texas held that the former majority member of a chapter 11 LLC debtor had to relinquish control of the LLC's Facebook page and Twitter account because they were property of the LLC's bankruptcy estate. In re CTLI, LLC, Case No. 14-33564, 2015 WL 1588085 (Bankr. S.D. Tex. April 3, 2015). CTLI, LLC was a Texas gun store and shooting range doing business as Tactical Firearms.
There has been much discussion in the media in the past year about the massive amount of professional fees that have been wracked up during the City of Detroit's Chapter 9 bankruptcy. There is always great interest - and debate - about such fees due to the nature of the process: insolvent individuals or companies with no place left to turn file for bankruptcy, creditors take a "haircut" on their claims, and the lawyers get paid. Or so the story goes. As with any complex process, though, there is plenty of nuance that gets lost in the wash, and often is more to the story.
On April 19, 2015, Frederick’s of Hollywood, Inc., a well-known retailer of women’s lingerie, filed for chapter 11 protection in the United States Bankruptcy Court for the District of Delaware. In addition to the petition filed by Frederick’s, petitions were filed by five other related entities. The cases have been assigned to The Honorable Kevin Gross, and are docketed as case no. 15-10836.
As previously reported, Judge Elias in Los Angeles had indicated an intention to bring to conclusion a long standing discussion with counsel regarding the extent of disclosure regarding asbestos bankruptcy trusts that plaintiffs will be obliged to provide when respon
Creditors of an entity or individual who is not paying its or his debts as they ordinarily come due may seek to have the alleged debtor adjudicated a bankrupt by the filing of an involuntary petition. Section 303 of the Bankruptcy Code governs the filing of involuntary bankruptcy petitions and allows creditors to force debtors into a liquidation or reorganization.
The United States Bankruptcy Court for the Southern District of Texas in In re Waco Town Square Partners, L.P., et al. considered whether it had the authority to order a non-debtor to dismiss a state court lawsuit.
When an insolvent entity files for bankruptcy, it can be tough to be a creditor. But holding equity — stock in a corporation or a membership interest in an LLC, a limited liability company — can be even worse. Under bankruptcy’s “absolute priority rule,” creditors generally must be paid in full before equity gets anything. That usually means that holders of equity, or claims treated as equity, get nothing.