The Bankruptcy Code treats insiders with increased scrutiny, from longer preference periods to rigorous equitable subordination principles, denial of chapter 7 trustee voting rights, disqualification in some cases of votes on a cram-down chapter 11 plan, and restrictions on postpetition key-employee compensation packages. The treatment of claims by insiders for prebankruptcy services is no exception to this general policy: section 502(b)(4) disallows insider claims for services to the extent the claim exceeds the "reasonable value" of such services.
On August 12, 2010, Caribbean Petroleum Corporation filed petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware. Caribbean Petroleum imports and distributes petroleum products in Puerto Rico through a network of 184 service stations. This post will look at the events leading up to the company's filing for bankruptcy, as well as what the company hopes to accomplish while in bankruptcy.
Introduction
Introduction
Earlier this month, the Liquidating Trustee in the Intermet bankruptcy filed preference actions against various defendants. This post will look at the nature of Intermet's business, why the company filed for bankruptcy and the circumstances behind the formation of the Liquidating Trust that is pursuing the preference actions.
Two decades ago, the Supreme Court tackled the issue of whether a third party had submitted itself to jurisdiction of the bankruptcy court. In Granfinanciera, S.A. v. Nordberg,1 the Supreme Court ruled that a party who has not filed a claim against a bankrupt's estate is not subject to the jurisdiction of the bankruptcy courts. A year later, in Langenkamp v.
The United States Bankruptcy Court for the District of Delaware recently denied the appointment of an examiner in U.S. Bank National Association v. Wilmington Trust Co. (In re Spansion, Inc.),1 despite the requirement in section 1104(c) of the Bankruptcy Code that the Court "shall" appoint an examiner in certain circumstances. In making this decision, Chief Bankruptcy Judge Kevin J.
In a recent decision in the chapter 11 case of WestPoint Stevens, Inc.,1 the United States Court of Appeals for the Second Circuit interpreted section 363(m) of the Bankruptcy Code to render an appeal of sale under section 363 of the Bankruptcy Code statutorily moot. The Second Circuit held that because the Bankruptcy Court had not stayed the order authorizing the sale, a stay of only one aspect of the sale rendered moot of the sale in its entirety.
In Marathon Petroleum Co. v. Cohen (In re Delco Oil Co.),1 the Court of Appeals for the Eleventh Circuit recently held that a trustee could avoid a debtor's post-petition transfers of funds that were cash collateral, notwithstanding that the payments had been made in good faith and in the ordinary course of business.
Introduction
Introduction