The confusion over Bitcoin grows in the latest lawsuit brought in a California bankruptcy court by Trustee Mark Kasolas against Marc Lowe, a former employee of HashFast Technologies LLC.
The trustee alleges, among other things, that Lowe received from the bankrupt Bitcoin mining company fraudulent transfers which included 3,000 Bitcoin (“BTC”) in September 2013, valued at approximately $363,861.
On Aug. 4, 2015, in City of Concord, New Hampshire v. Northern New England Telephone Operations LLC (In re Northern New England Telephone Operations LLC), No. 14-3381 (2nd Cir. Aug. 4, 2015), the U.S. Court of Appeals for the Second Circuit addressed the circumstances under which a creditor's lien on the property of a debtor may be extinguished through a Chapter 11 plan of reorganization.
(Bankr. W.D. Ky. Feb. 16, 2016)
Now that we’ve recovered from the balmy holidays, survived a record snowstorm in New York, eaten way too many snacks at Super Bowl parties, wished everyone a Happy Year of the Monkey, enjoyed two long weekends, and debated the effects of the passing of Justice Scalia, it’s time to settle back down to business and take the rest of this short week to catch up on what you may have missed in the Weil Bankruptcy Blog so far this year.
Bankruptcy Code Preempts McCarran-Ferguson Act in Dispute Over Courts’ Jurisdiction
(Bankr. S.D. Ind. Feb. 16, 2016)
Allowance of Claims—Make-Whole Premiums
On November 17, 2016, the Third Circuit Court of Appeals issued a highly anticipated ruling in the chapter 11 reorganization of Energy Future Holdings Corp. ("EFH"), invalidating one of the aspects of EFH’s confirmed chapter 11 plan. InDel. Tr. Co. v. Energy Future Intermediate Holding Co. LLC (In re Energy Future Holdings Corp.), 842 F.3d 247 (3d Cir. 2016), a three-judge panel of the Third Circuit reversed lower court rulings disallowing the claims of EFH’s noteholders for hundreds of millions of dollars in make-whole premiums allegedly due under their indentures.
Liquidation is one of those odd legal terms that has multiple meanings, some intuitive and others unexpected. In non-legal parlance, liquidation is what happens when you don’t pay your loan shark, or when you cross James Bond. Legal terminology has an analogous usage, such as liquidation of a business in bankruptcy proceedings. But it also has an entirely different meaning that is of great importance in the construction industry — liquidation of damages. Ironically, liquidation of damages is one of the ways that a contractor may prevent liquidation of its business.
Cases decided recently in Florida and Illinois call into question one legal rule that some might have thought well-settled: a first-perfected security interest in collateral beats a later-perfected lien creditor's interest in that same collateral. Seems simple enough. Except this rule might not be followed in every State.
Many start-up companies backed by venture capital financing, especially those still in the development phase or which otherwise are not cash flow breakeven, at some point may face the prospect of running out of cash. Although many will timely close another round of financing, others may not. This post focuses on options available to companies when investors have decided not to fund and the company needs to consider a wind down.