The Eleventh Circuit has held that amounts paid post-petition for an administrative expense claim under Section 503(b)(9) of the Bankruptcy Code do not reduce the “new value” otherwise available to the creditor as a defense to a preference claim. Auriga Polymers Inc. v. PMCM2, LLC, 2022 U.S. App. LEXIS 19761 (11th Cir. July 18, 2022).

The interface between federal bankruptcy law and similar state laws has a long history, going back to at least 1819, when the U.S. Supreme Court rules that a state insolvency law:

Voyager Digital Assets Inc., along with two of its affiliates, filed bankruptcy petitions in the Southern District of New York on July 5, 2022. The filing is significant—it followed months of an extreme downturn in the cryptocurrency sector which led to the collapse of Three Arrows Capital, a Singaporean cryptocurrency hedge fund (that borrowed $350 million and 15,250 Bitcoins from Voyager).

There have been several so-called "uptier" transactions over the last several years, where lenders have provided "rescue financing" to a distressed company senior in priority to existing debt. While there has been significant commentary about whether such financings are contractually permitted, there have been few decisions analyzing challenges to such transactions.¹ In Bayside Capital Inc. v. TPC Group Inc.

Mediation-in-bankruptcy has been an effective tool for resolving mass tort cases.

That effectiveness has been for the benefit of all parties involved, such as:

On 6 June 2022, Mr Justice Harris sanctioned a Hong Kong scheme of arrangement for Rare Earth Magnesium Technology Group (the Company) in re Rare Earth Magnesium Technology Limited [2022] HKFCI 1686 (Rare Earth).

WE WON. WE MADE NEW LAW.

In the Chapter 11 case of Beaulieu Group, LLC (carpet industry in Dalton, Georgia) in the U.S. Bankruptcy Court for the Northern District of Georgia, we defended Auriga Polymers Inc. (a subsidiary of Indorama Ventures) in a preference claim filed by the Beaulieu Liquidating Trustee. 

The Supreme Court of the United States granted certiorari on June 27, 2022, to determine whether section 363(m) of the Bankruptcy Code—concerning appellate review of bankruptcy court sale orders—is jurisdictional or only limits the remedy an appellate court may fashion. This issue has split the circuit courts of appeals. The case is set for oral argument in the October 2022 term.

On July 5, 2022, cryptocurrency brokerage Voyager Digital filed for chapter 11 in the Southern District of New York Bankruptcy Court, citing a short-term “run on the bank” due to the “crypto winter” in the cryptocurrency industry generally and the default of a significant loan made to a third party as the reasons for its filing. At Voyager’s first day hearing on July 8, 2022, the Bankruptcy Court asked the critical question of whether the crypto assets on Voyager’s platform were property of the estate or its customers.

DAOs, or decentralized autonomous organizations, are the latest trend in crypto. DAOs have the potential to disrupt the traditional economic system, but, they also raise significant issues of securities, tax, bankruptcy corporate law. Over the last few months, our Fintech group has issued a series of client alerts exploring these issues. You can find our complete collection below.