On April 28, 2022, Central District of California Bankruptcy Judge Ernest M. Robles issued a decision regarding the eligibility of a debtor to proceed as a Small Business Debtor under Subchapter V of the Bankruptcy Code.
Introduction
A key temporary bankruptcy related response to the pandemic has been re-implemented and extended with the passage of the Bankruptcy Threshold Adjustment and Technical Corrections Act (the “Act”) which extends the increase in the subchapter V debt limit for eligible businesses to $7.5 million for another two years.
On June 7, 2022, Congress passed (in a 392-21 vote) the “Bankruptcy Threshold Adjustment and technical Corrections Act,” which raises the debt limit back to $7.5 million for businesses electing treatment under the Small Business Reorganization Act (“SBRA”), codified under Subchapter V of Chapter 11.
Background
Delaware has seen a significant uptick in the number of assignment for the benefit of creditors (ABC) filings. Through recent decisions, the Court of Chancery has sent a strong message that it expects parties pursuing this bankruptcy alternative to do a better job of justifying the relief they seek. This will require significantly more frequent and robust disclosures to the court and public.
On June 1, 2022, Houston-based petrochemical manufacturer TPC Group Inc., and several affiliates filed a petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for District of Delaware to pursue a “prearranged” financial restructuring (Case No. 22-10493).
On June 1, 2022, Charlotte N.C.-based GT Real Estate Holdings, LLC, the company Carolina Panthers owner David Tepper created specifically for the Panthers new headquarters project in Rock Hill, S.C., filed a petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for District of Delaware after the deal to develop the new facility collapsed (Case No. 22-10505).
On June 1, 2022, California-based Zosano Pharma Corporation, a clinical-stage biopharmaceutical company enabling the systemic administration of therapeutics and other bioactive molecules to patients using a proprietary transdermal microneedle patch system, filed a petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for District of Delaware (Case No. 22-10506).
On June 1, the California Department of Financial Protection and Innovation (DFPI) released an invitation for comment on the DFPI’s regulatory approach to crypto asset-related financial products and services, as well as the potential regulation of such products and services under the California Consumer Financial Protection Law (CCFPL).
The Bankruptcy Protector
This term, Supreme Court Justice Elena Kagan has authored a pair of opinions related to arbitration. The first of these decisions, Badgerow v. Walters, 20-1143, 142 S. Ct. 1310 (2022) came down on March 31, 2022, where Justice Kagan, writing for the 8/1 majority, held that a court must have an independent basis of federal jurisdiction to undertake a petition to confirm or vacate an arbitration award.