Section 524 of the United States Bankruptcy Code (the Code) describes the effect of a discharge of a debtor, and in section 524(e), provides that a discharge of a debtor does not affect the liability of any other entity for the debtor's obligations. Today, virtually every plan of reorganization or liquidation includes releases for officers, directors and employees of the debtor, affiliates of the debtor, debtor and committee counsel involved in the case, the members of the creditors committee and plan sponsors, among others.
A California Franchise Tax Board (FTB) Chief Counsel Ruling concluded that a taxpayer’s sales of assets pursuant to a plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code were not “occasional sales” within the meaning of 18 Cal. Code Regs. § 25137(c)(1)(A)2. Instead, the sales of assets were deemed to be part of the taxpayer’s normal course of business and occurred frequently. As a result, the taxpayer’s gross receipts from the asset sales were includable in its sales factor for apportionment purposes. Under 18 Cal. Code Regs.
A recent bankruptcy auction of a Texas powerplant by Optim Energy LLC provided an important lesson for potential bidders at bankruptcy auctions and their representatives on the importance of developing a clear bidding strategy in advance of the auction, and making sure the representative understands both the bidding strategy and the scope of his or her authority at the auction sale.
In 1932, J. Howard Marshall and William O.
Providing an important reminder about the intersection of privacy law and bankruptcy, a bankruptcy judge has ordered the appointment of a consumer privacy ombudsman in the Chapter 11 case filed by Crumbs Bake Shop.
INTRODUCTION
A senior mortgagee battled the debtor and a junior mortgagee over its entitlement to post-petition interest: If and when did it become oversecured and thus entitled to interest? Was it entitled to interest at the default rate? Should the interest be compounded?
On July 16, 2014, the Uniform Law Commission (the “Commission”) approved a series of discrete amendments to the Uniform Fraudulent Transfer Act (the “UFTA”) and renamed it the Uniform Voidable Transactions Act (the “UVTA”). The UVTA is intended to address inconsistency in the courts, better harmonize with the Bankruptcy Code and the Uniform Commercial Code (the “UCC”), and provide litigants with greater certainty in its application to a fraudulent transfer action.
A recent pair of opinions from New York and Pennsylvania shows the importance of evaluating all parts of director and officer (D&O) insurance coverage, down to each definition. These cases, one holding for the insured and one for the insurer, demonstrate that a policy’s terms can be absolutely critical if the insured seeks indemnification for defense costs.
This article was first published in the summer 2014 issue of NABTalk, the publication of the National Association of Bankruptcy Trustees.