Typically, when an individual debtor files for bankruptcy, all of his or her belongings become part of the big “property of the estate” pot that the court ladles up pro rata among hungry creditors. But debtors need to eat too. Exemption law allows individual debtors and their families to keep some basic property, such as the clothes on their backs and roofs over their heads.
Section 109(a) of the Bankruptcy Code requires debtors to either reside or have a domicile, place of business, or property in the United States. A split of authority exists whether a foreign debtor seeking recognition of its foreign proceeding under chapter 15 of the Bankruptcy Code must satisfy these requirements.&nb
“[T]he automatic stay is automatic as applied to a debtor because that is what the statute says.
As to non-debtors, it is relief that is available, but it is not automatic.”
– Judge Brian M. Cogan (E.D.N.Y.), August 20, 2015
“Who by water and who by fire, who by sword and who by beast, who by famine and who by thirst, who by [bankruptcy courts deciding matters that are outside their constitutional authority]”
– Rosh Hashanah liturgy, as modified
Here, at the Bankruptcy Blog, we are committed to keeping you up to speed on the current state of bankruptcy law. Today’s post provides readers with an update to a decision by the United States Bankruptcy Court for the District of Delaware, which considered whether the debtors were required to assume a bundle of related agreements as one executory contract, or whether the debtors could assume only those agreements that contained provisions most favorable to their ongoing operations.
Although almost all of an individual debtor’s assets become property of the estate upon a bankruptcy filing, certain exceptions exist to the rule at both the federal and state level. In some jurisdictions, funds held for a debtor in retirement plans are exempt assets. An open question, however, is whether payments distributed from such plans prior to the petition date are also exempt assets. The United States Court of Appeals for the Tenth Circuit recently held in
Executive Summary
On 28 January, the English High Court handed down the first ever judgment sanctioning a restructuring plan under Part 26A of the Companies Act 2006 (“CA 2006”) (“Plan”) invoking the new cross class cram down procedure introduced into UK law in June 2020.
The Finance Act 2020 provides that directors, managers, shareholders, lenders and others can be made jointly and severally liable for the outstanding tax debts of insolvent (or potentially insolvent) companies and limited liability partnerships (LLPs).
A recent bankruptcy court decision out of the United States Bankruptcy Court for the Central District of California, In re Verity Health Sys. of Cal., Inc., Case No. 2:18-bk-20151 (ER) (Bankr. C.D. Cal. Nov. 27, 2019), is a good reminder of how difficult it is for a purchaser under an asset purchase agreement to get out of the deal by invoking a Material Adverse Effect clause (also known as a Material Adverse Change clause) (an “MAE”).