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.
Determining whether a security interest is properly perfected by using a state’s online lien search may be leading you astray.
Many companies that file for bankruptcy protection have liabilities that cannot be definitively quantified as of the bankruptcy petition date. Such “unmatured,” “contingent,” “unliquidated,” or “disputed” debts could arise from, among other things: (i) causes of action that are being litigated at the time of a bankruptcy filing but have not resulted in a judgment; or (ii) claims against the company that exist prior to a bankruptcy filing but have not been asserted against the company in litigation or otherwise, let alone liquidated, as of the petition date.
The Bankruptcy Appellate Panel for the 9th Circuit in Chantel v. Pierce, 2015 Bankr. Lexis 2174, recently explained what can constitute a sham trust to enable creditors to reach assets transferred to that trust. A California trust had been created with the Chantels as co-trustees. After a judgment had been entered against them, they filed a Chapter 13 bankruptcy, which was converted to a Chapter 7. In their schedules, the Chantels claimed they owned no real property and had not made any transfers to their self-settled trust within the previous 10 years.
A “structured dismissal” of a chapter 11 case following a sale of substantially all of the debtor’s assets has become increasingly common as a way to minimize costs and maximize creditor recoveries. However, only a handful of rulings have been issued on the subject, perhaps because bankruptcy and appellate courts are unclear as to whether the Bankruptcy Code authorizes the remedy.
In a previous post this blog addressed the Supreme Court’s 2011 ruling in Stern v.
The Delaware bankruptcy court recently denied a debtors’ motion to sell real estate free and clear of a bank’s senior liens on the properties. The court rejected the debtors’ arguments that the bank could be compelled to take less than the full amount of the bank’s debt under section 363(f)(5) of the Bankruptcy Code. The decision is a useful reminder that, in some jurisdictions, a bank holding senior liens may be entitled to veto any sale that does not result in payment-in-full.
“It’s not that I’m afraid to die, I just don’t want to be there when it happens.” — Woody Allen
The Bankruptcy Court for the Northern District of Illinois issued a noteworthy opinion for those whose work involves real estate mortgage conduit trusts (REMIC trusts) or utilization of the Bankruptcy Code’s “safe harbor” provisions. In In re MCK Millennium Ctr. Parking, LLC,1 Bankruptcy Judge Jacqueline P.
The recent decision of the United States Court of Appeals for the Third Circuit in In re One2One Communications, LLC may radically alter the ability of debtors to escape appeals of confirmed plans for reorganization. The Third Circuit, which governs the influential Delaware bankruptcy courts, has for almost 20 years embraced the judicially created doctrine of “equitable mootness” as a basis for dismissal of ap