Forgot to Get a Court Order Approving a Postpetition Loan? It May Not Matter
In a chapter 15 decision, In re Daebo International Shipping Co., Judge Michael E.
“Desperate times call for desperate measures” is often a rallying cry to justify harsh actions taken during times of panic and uncertainty which, in retrospect, are regrettable. To protect against such adverse consequences in bankruptcy, there are and should be safeguards in place to prevent creditors from imposing unreasonable restrictions on a debtor at the immediate onset of an involuntary case. In
We recently blogged about Weinman v. Walker (In re Adam Aircraft Industries, Inc.), a decision from the U.S.
One of the main benefits of bankruptcy is the ability of a debtor to reject its burdensome contracts. Although a debtor’s right of rejection appears to be relatively straightforward, section 365 of the Bankruptcy Code can raise a number of issues. One such issue is whether the contract is executory. If the contract is not executory, a debtor may not avail itself of section 365’s rejection powers. Usually it is the debtor who argues in favor of the executory nature of a contract; however, this was not the case in
“Who by water and who by fire, who by sword and who by beast, who by famine and who by thirst, who by [bankruptcy courts deciding matters that are outside their constitutional authority]”
– Rosh Hashanah liturgy, as modified
Here, at the Bankruptcy Blog, we are committed to keeping you up to speed on the current state of bankruptcy law. Today’s post provides readers with an update to a decision by the United States Bankruptcy Court for the District of Delaware, which considered whether the debtors were required to assume a bundle of related agreements as one executory contract, or whether the debtors could assume only those agreements that contained provisions most favorable to their ongoing operations.
Seeking to recharacterize a debt claim as an equity contribution to the debtor through the equitable powers of the bankruptcy court (something we’ve written about quite a bit in our blog) is one way to reduce creditor claims against the bankruptcy estate, but only in certain circuits.
Executive Summary
While there has been much fuss over the recent ruling by the United States District Court for the Southern District of New York in In re Nine West LBO Securities Litigation1 due to its potential ramifications for director liability, as we explored in Part I of our series on this case here, court watchers have paid less attention to the court’s treatment of officer liability and the interes