Debtors in Chapter 11 proceedings rarely pay unsecured creditors a meaningful dividend on prepetition accounts receivable balances, much less pay them in full. In an era of aggressive lending to place capital in the market, loan to value ratios are high. When a company experiences financial distress or insolvency, unsecured creditors may be “out of the money” from the get-go.
On September 18, in an en banc review, the Court of Appeals for the Eleventh Circuit overruled, in part, seminal casesBarger v. City of Cartersville, 348 F.3d 1289 (11th Cir. 2003) and Burnes v. Pemco Aeroplex, Inc., 291 F.3d 1282 (11th Cir. 2002), adopting a totality-of-the-circumstances analysis when facing questions of judicial estoppel.
A Primer for Issuer Tender Offers, Debt Exchange Offers, Repurchases and Other Liability Management Matters
This primer is a one-stop comprehensive guide for any issuer seeking to restructure its non-convertible debt securities outside of bankruptcy. This publication:
• summarizes the U.S. federal securities laws, rules and regulations that apply to debt restructurings;
• describes various types of debt restructurings; and
• discusses various practical considerations arising in debt restructurings.
The ability of a trustee or chapter 11 debtor-in-possession ("DIP") to sell bankruptcy estate assets "free and clear" of competing interests in the property has long been recognized as one of the most important advantages of a bankruptcy filing as a vehicle for restructuring a debtor’s balance sheet and generating value. Still, section 363(f) of the Bankruptcy Code, which delineates the circumstances under which an asset can be sold free and clear of "any interest in such property," has generated a fair amount of controversy.
The Bankruptcy Protector
Chapter 11 debtors operate under various levels of uncertainty. Often a company is dependent upon others to provide financing or close transactions necessary for the company’s survival. Such was the case of Eclipse Aviation, which filed for Chapter 11 bankruptcy in November 2008, with an (apparent) agreement to sell itself to its largest shareholder.
The U.S. Bankruptcy Appellate Panel for the Eighth Circuit recently affirmed a bankruptcy court’s holding that a creditor held an unenforceable lien against a debtor’s real property because the property was owned by the entireties and the lien was thus avoidable under Bankruptcy Code § 522(f)(1).
A copy of the opinion is available at: Link to Opinion.
It is hard to peruse the internet or even mainstream media outlets without hearing about bitcoin. What is this ubiquitous bitcoin? It depends on whom you ask.
A CNN Money articled defined bitcoin as “a new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto.” The IRS has recently defined bitcoin as an “intangible asset” for investors, making it subject to capital gains and loss treatment using the realization method.
Court decisions about failed Ponzi schemes often make good reading. The fact patterns always involve actual fraud. The illicit schemes give rise to insightful discussions on various legal concepts.