Your former employee sues you, but your employee-plaintiff filed for bankruptcy. You diligently research the bankruptcy filings and discover the employee did not disclose the lawsuit against you in those filings, which are sworn to under oath. You might have a winner to get out of the case, right? Well, it is not quite that simple, according to a recent ruling in Georgia.
Australia's largest corporate insolvency reform in 30 years is set to be introduced at the beginning of 2021. Draft legislation, which applies to small businesses, was released last week. Organisations need to familiarise themselves with the information ahead of an anticipated wave of insolvencies in 2021, as COVID-19 related government incentives cease.
Key takeouts
"Cramdown" chapter 11 plans, under which a bankruptcy court confirms a plan over the objection of a class of creditors, are relatively common. Less common are the subset of cramdown plans known as "cram-up" chapter 11 plans. These plans are referred to as such because they typically involve plans of reorganization that are accepted by junior creditors and then "crammed up" to bind objecting senior creditors.
On June 22, 2020, the Federal Energy Regulatory Commission ("FERC") issued an order concluding that FERC and the U.S. bankruptcy courts have concurrent jurisdiction to review and address the disposition of natural gas transportation agreements that a debtor seeks to reject under section 365(a) of the Bankruptcy Code (11 U.S.C. §§ 101 et seq.).
Courts sometimes disagree over whether provisions in a borrower's organizational documents designed to prevent the borrower from filing for bankruptcy are enforceable as a matter of federal public policy or applicable state law. There has been a handful of court rulings addressing this issue in recent years, with mixed results.
On October 7, 2020, the United States Court of Appeals for the Ninth Circuit (“Ninth Circuit”) vacated, as moot, two FERC orders asserting concurrent jurisdiction to review the disposition of certain Pacific Gas & Electric Corporation (“PG&E”) power purchase agreements (“PPAs”) that PG&E sought to reject through bankruptcy. In a brief memorandum decision, a three-judge Ninth Circuit panel explained that the orders had become moot when the bankruptcy court confirmed a reorganization plan that had PG&E assume, rather than reject, the PPAs.
Can state regulatory agencies move ahead with lawsuits against businesses who file for bankruptcy in order to enforce consumer protection and business laws, or does the automatic stay’s broad injunctive sweep capture those actions? The answer depends on whether the state is acting in its regulatory capacity or simply like another creditor – and the distinction is not always clear.
"Safe harbors" in the Bankruptcy Code designed to insulate non-debtor parties to financial contracts from the consequences that normally ensue when a counterparty files for bankruptcy have been the focus of a considerable amount of scrutiny as part of evolving developments in the pandemic-driven downturn. One of the most recent developments concerning this issue in the courts was the subject of a ruling handed down by the U.S. Court of Appeals for the Second Circuit in connection with the landmark chapter 11 cases of Lehman Brothers Holdings Inc. ("Lehman") and its affiliates.
The practice of conferring "derivative standing" on official creditors' committees to assert claims on behalf of a bankruptcy estate in cases where the debtor or a bankruptcy trustee is unwilling or unable to do so is a well-established means of generating value for the estate from litigation recoveries. However, in a series of recent decisions, the Delaware bankruptcy courts have limited the practice in cases where applicable non-bankruptcy state law provides that creditors do not have standing to bring claims on behalf of certain entities.