Over the last two years, courtesy of a once-a-century pandemic, government-mandated business closures, nationwide stay-at-home orders, and—unprecedented—disruptions to the global supply chain have illuminated, previously unknown, vulnerabilities across a whole host of industries. Would anyone have seriously questioned the viability of office space two years ago? Now, inflation, in keeping with the recent chaos, may be upending the viability of another tried-and-tested institution: the supply contract.
You’ve gotta admire the Debtor in In re Deirdre Ventura.
Debtor has been fighting to save a Bed and Breakfast business through bankruptcy: beginning in 2018 with a regular Chapter 11, and then struggling to get into Subchapter V.
Debtor’s is a you-can’t-make-this-stuff-up story of persistence through adversity.
Debtor has survived, for example, an inexplicably-bad appellate opinion refusing to allow Debtor’s Subchapter V election. The appellate opinion declares:
Assignment for benefit of creditors (“ABC”) has existed for centuries under the common law of England and the United States. And the ABC process has worked well under that common law!
ABC Function
ABC has been an effective tool in the toolbox of debtor and creditor remedies for resolving financial stress. Specifically, ABC allows a failing business to shut down with efficiently and credibility:
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To the long list of things people love about lawyers we can add last week’s holding by the Eleventh Circuit Court of Appeals that “Blvd.” is utterly unrecognizable as “Boulevard” – at least by Article 9 of the Uniform Commercial Code as enacted in Florida.
Siegel v. Fitzgerald, 142 S. Ct. 1770 (June 6, 2022)
The purchase and sale of assets by a debtor is governed by Section 363 of the Bankruptcy Code. So-called “363 sales” are typically attractive from a buyer’s perspective (and may be a primary reason for a bankruptcy filing). Perhaps the most important benefit afforded to buyers in 363 sales is the ability to acquire assets “free and clear” of claims and interests of third parties.
Part I: Introduction and Background Cryptoassets & Insolvency 2 Introduction Cryptoassets have emerged from relative obscurity to become an increasingly significant and mainstream presence: in just five years the global market cap for cryptocurrencies rose from around $15bn to over $3tn at its peak in November of last year.
The interrelationship between an assignment for benefit of creditors (“ABC”) proceeding and an involuntary bankruptcy filing, for the same debtor, is governed by various portions of the Bankruptcy Code.
But that relationship remains ill-defined, nonetheless.
What follows is an attempt to summarize a bankruptcy court opinion dealing with that relationship. And here is two of its main conclusions:
Summary
The Hong Kong Court and the US Bankruptcy Court have made conflicting comments regarding the discharge of New York law-governed debt by a foreign scheme of arrangement, where that scheme is the subject of recognition under Chapter 15 of the US Bankruptcy Code.