In the world of private equity, vast sums of money are raised by private investors who pool their money into collective funds in order to acquire companies, i.e., a “portfolio company”, with the goal of eventually flipping the portfolio company at a significant profit. Sometimes, however, that bet goes wrong, and the portfolio company is sold at a loss or, worse, liquidated in bankruptcy.

The Department of Energy announced June 28 that Abound Solar Manufacturing LLC, a Colorado-based manufacturer of thin film solar panels and recipient of a $400 million loan guarantee, plans to stop operations this week, making it the fourth company backed by the Department of Energy’s loan guarantee program to file for bankruptcy. The company received a loan guarantee in December 2010 to help fund construction of two commercial-scale plants.

In a client advisory sent by our office a few months ago, we described a decision in the Madoff saga in which the District Court for the Southern District of New York (the Court) closed off a potential avenue of significant recovery for the Madoff Trustee (the Trustee) and the Ponzi scheme victims by denying the Trustee standing to pursue certain claims against feeder funds – firms that sent investors’ funds to Madof

If a creditor is holding property of a party that files bankruptcy, is it “exercising control over” such property (and violating the automatic stay) by refusing the debtor’s turnover demands? According to the Supreme Court, the answer is no – instead, the stay under Section 362(a)(3) of the Bankruptcy Code only applies to affirmative acts that disturb the status quo as of the filing date. In other words, the mere retention of property of a debtor after the filing of a bankruptcy case does not violate the automatic stay.

In French v. Linn Energy, L.L.C. (In re Linn Energy, L.L.C.), the United States Court of Appeals for the Fifth Circuit addressed the scope of Bankruptcy Code Section 510(b), settling on an expansive reading of the Section, holding that a claim for “deemed dividends” should be subordinated.

InIn Re Lexington Hospitality Group, LLC, the United States Bankruptcy Court for the Eastern District of Kentucky thwarted a lender’s efforts to control whether its borrower could file bankruptcy. As a condition to the loan, the lender mandated that the borrower’s operating agreement have certain provisions that require the affirmative vote of an “Independent Manager” and 75% of the members to authorize a bankruptcy.

Today’s U.S. Supreme Court decision in Commonwealth of Puerto Rico v. Franklin California Tax-Free Trustputs an end to one of Puerto Rico’s multi-pronged efforts to deleverage itself.

At the end of “The Candidate”, Robert Redford’s title character, having won, famously asks, “What do we do now?”

A similar question can be asked now that the federal district court in Puerto Rico has struck down the Puerto Rico Public Corporation Debt Enforcement and Recovery Act.

ECOtality, an electric vehicle charging station manufacturer and a recipient of 2009 stimulus package Department of Energy grants, filed for bankruptcy on September 17. The company received $100.2 million in grants, but the Department froze the remaining $2.5 million in grants on August 8.

The secured lender industry experienced a collective sigh of relief on May 29 after the Supreme Court ruled in RadLAX Gateway Hotel, LLC, et al. v. Amalgamated Bank that credit bidding remains a viable option to protect collateral in a cramdown bankruptcy plan. Expressly inscribed in Sections 363(k) and 1129(b)(2)(A) of the Bankruptcy Code, credit bidding has long been understood as a fairly uncontroversial right; until recently.