In these difficult economic times, companies seeking additional liquidity may turn to alternative sources of financing. Companies with assets that can be monetized (e.g., accounts receivable, intellectual property, real estate, equipment, etc.) may discover a number of options available to them. In particular, accounts receivable financing may be an attractive way for certain companies to obtain working capital relatively quickly.

The below is a quick snapshot of three recent tax-related developments in the insolvency and restructuring sphere.

Farnborough – appointment of a receiver and tax grouping

All too often the task of procuring and renewing D&O insurance at a portfolio company is assigned to the portfolio company’s CFO or Controller, who employs an insurance broker to find the best price for the amount of coverage deemed appropriate by the broker. When such insurance is procured and thereafter renewed, the CFO/Controller simply reports to the board the fact of the procurement/renewal and few questions about the terms of coverage are discussed at the board level. This can be a big mistake.

Readers familiar with contract law undoubtedly know the “mailbox rule,” that an offer is accepted the moment a document goes in the mail.1 The United States Bankruptcy Appellate Panel for the Ninth Circuit (the “BAP”) recently dealt with its own variant of the mailbox rule: does the issuance of a check constitute a transfer of estate assets on the date the check is delivered or on the date it is honored?

Overview

In Asarco, LLC v. Noranda Mining, Inc., the Tenth Circuit Court of Appeals held that representations made to the bankruptcy court that the Debtor’s settlement of environmental claims reflected only the Debtor’s share of the cleanup costs did not judicially estop the Debtor from brining a contribution claim against another potentially responsible party for those same costs.

The chapter 11 cases of Gawker Media, LLC and its debtor affiliates have given the bankruptcy vultures everything they could ever hope for in one case – celebrity, scandal, a cameo by the First Amendmen

The Bankruptcy Code’s priority scheme provides that the shareholders generally cannot receive anything on account of their investment until all secured, priority and unsecured creditors are paid in full.

Who doesn’t love a good catch-all provision? In a world of infinite possibilities, attorneys often find themselves drafting language designed to encompass a plethora of contingencies. Are such efforts sometimes overkill? Perhaps. Nevertheless, given our imperfect ability to predict the future, such provisions are often necessary and appropriate.

When Can a Subsidiary Be Liable for the Actions of Its Owners?

Gary Ozenne seems to love bankruptcy court.  To wit, Mr. Ozenne filed, on his own behalf, seven bankruptcy cases over the course of five years.  Mr. Ozenne has three times petitioned the United States Supreme Court, on each occasion seeking bankruptcy-related relief.  Unfortunately for Mr.