One of the more effective risk-mitigation legal tools used by  senior real estate lenders is the single purpose entity borrower.  Among other things, having a single purpose, bankruptcy  remote borrower makes avoiding the risks of bankruptcy easier.  Even in bankruptcy, if the borrower is truly single purpose, and it  keeps the universe of creditors small, the senior secured lender  will have an easier time defeating any plan of reorganization  proposed by the borrower because it will control all of the  legitimate classes of creditors by virtue of th

In the approach to bankruptcy, struggling businesses may experience problems performing their contracts, and counterparties often see trouble on the horizon. What can a non-debtor counterparty do to protect itself? And how are its rights impaired when the debtor finally commences a bankruptcy case?

In In re Physiotherapy Holdings, Inc., 506 B.R. 619 (Bankr. D. Del. 2014) (No.

What do you get when you combine a 20+ year old bankruptcy, a contaminated landfill, and a state regulatory agency that moves at a glacial pace? The answer: In re Solitron Devices, Inc., a recent decision from the Bankruptcy Court for the Southern District of Florida.

The recent Chapter 11 bankruptcy filing by James River Coal was the latest reminder that mining companies continue to face unique and myriad challenges. Several factors, including the depressed global economy, tougher environmental rules and enforcement, funding and liquidity challenges, and market volatility, are causing industry-wide stress, particularly for coal companies. Trade press and pundits suggest that more mining company bankruptcies may be on the horizon.

The Stern v. Marshall Decision. In its 2011 decision in Stern v. Marshall, decided by a 5-4 vote, the U.S. Supreme Court held that even though Congress designated certain state law counterclaims as “core” proceedings, Article III of the U.S. Constitution prohibits bankruptcy courts from finally adjudicating those claims. Stern v.

On June 9, 2014, the United States Supreme Court addressed an issue left open in Stern v. Marshall.¹ Instead of bringing clarity to procedural confusion created by Stern, the Court’s opinion in Executive Benefits Insurance Agency v.

On Monday, the Supreme Court confirmed¹ that bankruptcy courts may hear “Stern-type” matters (such as tortious interference counterclaims) that relate to bankruptcy proceedings, so long as a district court reviews the bankruptcy court’s proposed findings and renders the final decision. Other questions left in the wake of Stern v. Marshall,² however, remain unanswered and will continue to occupy the attention of parties to bankruptcy matters and courts alike.

BACKGROUND: IN THE WAKE OF STERN V. MARSHALL

On June 9, 2014, a unanimous Supreme Court issued the latest in a series of key rulings regarding the extent of a bankruptcy court’s constitutional authority.¹ Notably, while Monday’s Executive Benefitsdecision answered one important question arising out of the Court’s 2011 decision in Stern v. Marshall,² it also left the primary question that resulted in a split in the Circuit Courts of Appeals to be decided another day.

The Aftermath of Stern v. Marshall

In Part II of this three-part entry, we mentioned that the District Court for