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Court Rules Mere Conduit Defense Not Suitable for a Motion to Dismiss Image

Court Rules Mere Conduit Defense Not Suitable for a Motion to Dismiss

Daniel A. Lowenthal

At the motion to dismiss stage, courts usually won't consider affirmative defenses. This issue arose recently in a preferential transfer case, where a defendant sought to dismiss a complaint by arguing it was a mere conduit, not an initial transferee.

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Preserving Bargained for Contractual Entitlements In a Cure and Reinstate Plan Image

Preserving Bargained for Contractual Entitlements In a Cure and Reinstate Plan

Allison J. Arotsky

This article focuses on the cure requirement under Section 1124(2)(A), highlights how courts have interpreted the interplay between Section 1124(2)(A) and related Bankruptcy Code provisions, and suggests best practices to ensure that creditors are not leaving money on the table.

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Second Circuit Reinforces Bankruptcy Code Settlement Payment Safe Harbor Image

Second Circuit Reinforces Bankruptcy Code Settlement Payment Safe Harbor

Michael L. Cook

The Second Circuit affirmed the lower courts' judgment that a "transfer made … in connection with a securities contract … by a qualifying financial institution" was entitled "to the protection of ... §546 (e)'s safe harbor ...."

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Real Property Sale Proceeds Must Be Paid First to Unavoided Portion of IRS Tax Lien Image

Real Property Sale Proceeds Must Be Paid First to Unavoided Portion of IRS Tax Lien

Andrew C. Kassner & Joseph N. Argentina Jr.

Given the downward pressure on commercial real estate valuations in many areas, and the increasing likelihood that owners of real property will cease paying real property taxes when there is no longer any equity, we decided to report on a recent decision issued by the Ninth Circuit that reversed a decision of the bankruptcy court allocating the distribution of the proceeds of a sale of real property pro rata between the IRS, on account of its tax lien, and the bankruptcy estate.

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Subchapter V Filings Plummet After Senate Fails to Keep Higher Limit Intact Image

Subchapter V Filings Plummet After Senate Fails to Keep Higher Limit Intact

Alexander Lugo

Subchapter V Filings for a recently crafted bankruptcy option meant to help small businesses overcome financial distress have plummeted after the U.S. Senate failed to pass a law that would keep its restrictions in place.

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J&J's Bankruptcy Vote Has Some Claimants' Lawyers Calling for a Recount Image

J&J's Bankruptcy Vote Has Some Claimants' Lawyers Calling for a Recount

Amanda Bronstad

The presidential vote is just a few days away, but the ballots in Johnson & Johnson's talc bankruptcy have lawyers already asking for a recount. At an Oct. 21 hearing, lawyers for thousands of talcum powder claimants clamored to crack open the confidential vote tabulation behind J&J's $9 billion prepackaged bankruptcy plan.

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Delaware Faces Challengers But Maintains Lead In Bankruptcy Filings Image

Delaware Faces Challengers But Maintains Lead In Bankruptcy Filings

Ellen Bardash

Large corporations filing for bankruptcy continue to turn to Delaware more than any other venue nationwide, according to a new report from Cornerstone Research. While Delaware has long tallied more large corporate bankruptcies than any other jurisdiction, the gap between it and the next most popular venue, the Southern District of Texas, has widened in 2024.

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Credible Fraudulent Transfer Advocacy Image

Credible Fraudulent Transfer Advocacy

Michael L. Cook

Appellate courts continue to use common sense when disposing of constructively fraudulent transfer appeals, as recent decisions show.

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Congress' Failure to Extend Subchapter V Debt Limit Hurts Small Businesses Image

Congress' Failure to Extend Subchapter V Debt Limit Hurts Small Businesses

Michael Napoli

Where it applies, Subchapter V has been a great success. But, much of that success was due to a temporary change to the law that allowed more companies to qualify for Subchapter V treatment. That change has now expired, taking with it the only viable avenue for many businesses to reorganize.

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How to Check a Privately-Held Company's Creditworthiness Image

How to Check a Privately-Held Company's Creditworthiness

Kenneth A. Rosen

How do you check on a company's creditworthiness when the company is privately held and does not make its financial statements publicly available? The answer is that you need to check alternative sources of information for hints as to whether the company is experiencing problems. This article provides some questions to ask to help recognize the warning signs in the answers.

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