Hoku, a publicly-owned Delaware corporation, filed for bankruptcy with just $8 million in assets compared to a relatively staggering $1.3 billion in liabilities, much of which was funded debt. In light of this significant insolvency, Hoku’s chapter 7 trustee brought various breach of fiduciary claims against Hoku’s board of directors, including one akin to a claim for “deepening insolvency.” As the case of Hopkins v.

On June 30, 2016, Congress passed and President Obama signed into law a new piece of federal legislation that will govern the restructuring of U.S. territories: Public Law No: 114-187. Although not limited to the Commonwealth of Puerto Rico, enactment of the new law, entitled the Puerto Rico Oversight, Management, and Economic Stability Act or “PROMESA,” represents a bipartisan achievement in the context of a worsening fiscal crisis in Puerto Rico.

Creditors seeking to file an involuntary petition against a debtor may want to consider doing their due diligence before using it as a tool in their ongoing disputes with a debtor.

TGIF, right?! Before kick starting your weekend — here’s what you need to know about the recent decision from the United States Court of Appeals for the Third Circuit in the chapter 11 cases of SemCrude L.P. and its debtor affiliates.

FACTS

Postpetition interest is a thorny area of bankruptcy law.  The myriad rules, coupled with the inconsistent way in which they are often applied, provide fodder for litigation and opportunity for confusion.  

The avoidance powers contained in chapter 5 of the Bankruptcy Code permit the recovery of certain prepetition “transfers” made by the debtor – either as a preference under section 547 or as a fraudulent transfer under either section 548 or state common law, made applicable under section 544 of the Bankruptcy Code.  Typically, the “tran

Federal bankruptcy law can benefit debtors and creditors alike. Provisions such as the automatic stay and absolute priority ensure a streamlined proceeding, preserving the debtor’s scarce resources for business rehabilitation and creditor repayment.  The alternative, multiple state court debt enforcement actions, would waste the debtor’s time and money on litigation (as valuable as bankruptcy lawyers may be). 

In the latest installment of our “Breaking the Code” series, we take a look at the rarely-mentioned section 108(c) of the Bankruptcy Code, which governs the effect of certain deadlines relating to nonbankruptcy legal actions:

Typically, when an individual debtor files for bankruptcy, all of his or her belongings become part of the big “property of the estate” pot that the court ladles up pro rata among hungry creditors.  But debtors need to eat too.  Exemption law allows individual debtors and their families to keep some basic property, such as the clothes on their backs and roofs over their heads.

“Once again, I’m not quite sure what that means.” – Bobby Boucher, The Waterboy