With the latest wave of bankruptcies sweeping the aviation and airline industries, you will find bankers and lawyers sweating over the priority and perfection of their aircraft liens. These bankruptcies seem to have a different character when contrasted with the bankruptcies of 2002 through 2004. Many of the 2008 bankruptcies are operational shut-downs and liquidations rather than restructurings. That means that the status of creditors (as secured or unsecured) is going to become acutely relevant and will determine how much the bankruptcy affects the creditor's financial outcome.
One week after Aegis Mortgage Corp. filed for chapter 11 in Delaware, a group of former employees filed their complaint seeking class certification over allegations that Aegis Mortgage Corporation, Aegis Wholesale Corporation and Cerberus Capital Management, L.P.—all allegedly acting as their employer—violated the Worker Adjustment and Retraining Notification (WARN) Act when they failed to give over 400 employees 60 days' notice prior to a mass termination by Aegis Mortgage on August 7, 2007.
The United States Bankruptcy Court for the Southern District of New York has denied approval of a settlement between Adelphia and its D&O insurers pursuant to which the insurers would have bought back their interests in the relevant policies issued to Adelphia for $32.5 million "with claims of others to policy proceeds...attaching to the proceeds of the sale."
The economic impact of forced budget cuts from the sequester and other government funding crises—ranging from a government shutdown to the federal debt limit—and congressional gridlock place disproportionate pressure on smaller- or second tier-government contractors. Business partners of a financially infirm contractor must prepare for when a contract business partner, co-venturer, or teaming partner falls over the fiscal cliff and files for bankruptcy protection. In this article, we will provide an over
The United States Bankruptcy Court for the District of Nebraska has held that an insurer may make settlement payments for claims against a debtor’s directors and officers where any claims of the debtor are subordinate to those of the directors and officers under the terms of the policy. The court stated that under these circumstances “the issue of whether the policies are property of the bankruptcy estate is irrelevant.” In re TierOne Corp., 2012 WL 4513554 (Bankr. D. Neb. Oct. 2, 2012).
A federal district court, applying Pennsylvania law, has held that the insolvency exclusion in an insurance agency’s professional liability policy excused the insurer from the duty to defend the agency in lawsuits alleging that it had caused employee benefit plans that it created to be underfunded. ACE Capital Limited v. Morgan Waldon Ins. Management, LLC, Civil Action No. 11-128, 2011 WL 5914275 (W.D. Pa. Nov. 28, 2011).
On February 8, 2011, the Federal Communications Commission (FCC) entered into a Consent Decree with Turner Broadcasting Systems, Inc. (Turner) relating to Turner's failure to seek prior FCC approval before consummating an internal restructuring. The Consent Decree reminds parties that it is important to comply with all pre-approval requirements relating to the assignments or transfers of control of Commission licenses.
It is a harrowing scenario for any seller of goods: a trading-partner files for bankruptcy and leaves the seller with thousands, even millions of dollars in unpaid invoices. In many instances, some of these goods were delivered only days before the bankruptcy filing. While a creditor may be able to assert reclamation rights, those rights are often difficult to enforce in bankruptcy and may be subordinate to the interests of an all assets lender.
Liquidations of struggling enterprises can take several forms. While many people are familiar with the concept of a "bankruptcy liquidation," the structure of a liquidation in bankruptcy may vary depending upon the specific type of case. Additionally, bankruptcy is not the only forum for liquidation of distressed companies, only the most common. This article provides a synopsis of some of the various types of liquidations.
Chapter 11 Liquidations
The United States District Court for the Central District of California has reversed a bankruptcy court ruling allowing two law firms—Snyder Miller & Orton LLP (SMO) and Morgan Lewis & Bockius LLP (MLB)—to serve as "special insurance counsel" to address insurance and insurance-coverage-litigation-related matters under the narrow special purpose standards of § 327(e). In re Thorpe Insulation Co., No. CV08-00246-DSF (C.D. Cal. Apr. 22, 2008). Citing In re Congoleum Corp., 426 F.3d 675 (3d Cir.