Question: Can a creditor prevent its debtor from filing bankruptcy by pre-petition contract terms?
Answer: No . . . according to In re Roberson Cartridge Co., LLC, Case No. 22-20192 in the Northern Texas Bankruptcy Court (03/07/2023, opinion at Doc. 77).
Facts
Bankruptcy lawyers recently gained access to a promising technology for improving the efficiency of tasks like drafting a motion for relief from stay. ChatGPT allows users to employ generative artificial intelligence by chatting with a chatbot on OpenAI’s website https://chat.openai.com/chat.
Say what?!.
“Hypothetical jurisdiction” for a bankruptcy appeal?!
Who knew? I sure didn’t.
But it is, apparently, a thing . . . and it may even be real.
At U.S. Supreme Court
A newly filed Petition in the U.S. Supreme Court is Waleski v. Montgomery, McCraken, Walker & Rhodes, LLP, Case No. 22-914 (Petition filed 3/16/2023).
–The Question
The Question Presented to the U.S. Supreme Court in Waleski v Montgomery is this:
Crypto firm bankruptcies and resulting disruption in the crypto ecosystem will continue to exacerbate liquidity and regulatory concerns in this space. Signs of contagion are evident as prices of almost every cryptocurrency type have halved in recent months. Since all participants supporting the crypto ecosystem are at risk, managing that risk is critical.
Fund managers should be prepared on multiple fronts, as the following examples illustrate:
The statutory language is clear. As of a bankruptcy petition’s filing date, the automatic stay of section 362 constricts many a creditor and bars many an action. The broad scope of section 362(a)(1) proscribes “the commencement or continuation ...
Turmoil in the tech ecosystem and escalating sentiment that a recession in the U.S. might occur in the near-term, indicate that startups, their lenders, and investors may soon confront extreme financial challenges – and will force all stakeholders in a troubled venture to consider strategic options. Distressed startups raise a unique set of legal issues that should be considered and addressed by their stakeholders in connection with any strategic transaction. Here are a few:
On March 22, 2023, the U.S. District Court for the Eastern District of Virginia (Court) granted the Federal Energy Regulatory Commission’s (FERC) Motion for Default Judgment and entered a default judgment against Powhatan Energy Fund, LLC (Powhatan Energy Fund). The Court awarded FERC $3,465,108 in disgorgement and $16,800,000 in civil penalties.
A chapter 11 plan may be modified after votes have been solicited on the plan, but prior to confirmation, without providing creditors and interest holders with an amended disclosure statement and another opportunity to vote on the modified plan, provided, among other things, that the modifications do not adversely affect creditors or interest holders who previously voted to accept the plan.
Since 1993, decisions out of the U.S. Bankruptcy Court for the Southern District of New York consistently adopted the aggregate “rent approach” for calculating lease rejection damages in bankruptcy proceedings. But in Bankruptcy Judge Wiles’ recent decision in In re Cortlandt Liquidating LLC, he departed from the “rent approach” in favor of the “time approach,” which is based on the time remaining under the lease rather than factoring in the total or aggregate rent still owed under the lease.
When can a municipality declare bankruptcy under chapter 9 of the Bankruptcy Code? An issue explored the headline-grabbing chapter 9 case of Detroit, that’s the question illuminated by a decision dealing with the travails of Chester, Pennsylvania, issued by the United States Bankruptcy Court for the Eastern District of Pennsylvania (“Bankruptcy Court”) on March 14, 2023.
Chester’s Long Road to Insolvency
Background