“Can I be personally liable?” Directors, officers, and managers of business entities frequently ask that question of their attorneys. A recent Delaware decision reveals an important area of potentially huge personally liability involving a sudden shutdown caused by insolvency.

Picture the scene: You have just received word that your customer has filed Chapter 11. You had followed my ad-vice (see article Reducing a Customer’s Accounts Receiva-ble in the Zone of Insolvency), and put the customer on a cash-before-delivery basis and demanded assurances of performance. You were successful in reducing the ac-counts receivable owed, and avoiding preference liability in doing so.

The customer, now a Chapter 11 debtor, calls and de-mands that you continue to ship, and resume credit terms.

The issue of whether gathering agreements are subject to rejection in bankruptcy as executory contracts and whether certain provisions of those agreements run with the land and survive rejection will impact ongoing bankruptcy proceedings of producers, as well as renegotiations of existing gathering agreements.

Bankruptcy is all about the debtor’s assets, specifically how many and who gets them. The reason that many bankruptcy cases are contentious is that the parties often disagree about the amount of assets available for distribution to creditors, as well as how the assets should be divvied up.

Do you serve on your condominium’s board as a fun way to meet your neighbors and test out your governance skills? What seems like a low-commitment diversion can balloon into a stressful time suck – or worse.  You may be held personally liable for breaching fiduciary duties to your condo.  And if you fall into really bad luck and end up in bankruptcy, you may not even be able to discharge debts for such liability, as a recent Fifth Circuit decision reminds us.  

Bankruptcies in the retail space are prevalent these days. Some of the more recent and prominent bankruptcies are Pacific Sunwear, Sports Authority, American Apparel and RadioShack. Even if you do not have a lease with a “big box” retailer, plenty of smaller retailers are in distress as well. For Landlords, what do you do if one of your tenants files Chapter 11?

Let’s start with what not to do.

We’ve previously written on various cases in which parties have sought to save or revive late filed pleadings by arguing those pleadings “relate back” to previously filed documents with varying degrees of success.

A Chicago bankruptcy court declined to dismiss the Chapter 11 case of a “bankruptcy remote” limited liability company even though the debtor failed to obtain the unanimous consent of its members as required by its operating agreement. See In re Lake Mich. Beach Pottawattamie Resort, LLC, Case No. 15bk42427, 2016 Bankr. LEXIS 1107 (Bankr. N.D. Ill. April 5, 2016).

The doctrine of equitable mootness provides that Chapter 11 reorganization plans will be deemed moot, and therefore not subject to appellate review, if a plan has been substantially consummated and granting appellate relief would impair the rights of innocent third parties relying on the confirmation order.

Despite the initial glee of the prospect of a United States that was independent of Middle East oil, beginning in the fourth quarter of 2014, the price of oil started dropping precipitously.  As noted in a recent article, over 80 bankruptcies in the oil industry were filed in 2015, up 471 % over calendar year 2014.