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The Bankruptcy Hotline Image

The Bankruptcy Hotline

ALM Staff & Law Journal Newsletters

The latest rulings of importance to you and your practice.

Bankruptcy Filing Set New Record in Calendar Year 2002 Image

Bankruptcy Filing Set New Record in Calendar Year 2002

ALM Staff & Law Journal Newsletters

The Administrative Office of the U.S. Courts reported that a new record high in bankruptcy filings was established for the 2002 calendar year. There were a total of 1,577,651 petitions filed during the 12-month period ending December 31, 2002, an increase of 5.7% from the previous year, when 1,492,129 petitions were filed. The previous record for filings in any 12-month period was recorded in the Judiciary's fiscal year 2002 (October 1, 2001-September 30, 2002) when 1,547,669 filings were reported.

Features

Preventing a Haven for Wrongdoers Image

Preventing a Haven for Wrongdoers

Frederick M. Joyce & Ronald E. Quirk, Jr.

The current economic downturn has resulted in a huge number of bankruptcy filings by publicly traded companies. During 2001, for example, a record 257 publicly traded companies filed for bankruptcy. The telecommunications sector was particularly hard hit, as 14% of those bankruptcies were filed by publicly traded telecom companies.

Answering to the Regulators Image

Answering to the Regulators

Ivan L. Kallick

Insurance companies, like any other segment of today's fragile economy, have shareholders, creditors, insureds, and regulators to whom they are answerable. They are hardly immune from the ups and downs of so-called new economy companies, nor the more time-tested old economy companies. As such, what is the likely result from a jurisdictional and regulatory standpoint of an insurance company seeking relief by the filing of a bankruptcy proceeding?

Don't Pay Twice for Your Equity! Image

Don't Pay Twice for Your Equity!

Michael J. Sage & Mark E. Palmer

In certain cases, a company may seek to exchange its outstanding debt for equity while also extinguishing (or 'squeezing-out') the interests of some or all of its prior shareholders. The need to reduce or eliminate shareholders typically stems from perfectly valid business reasons, including a desire to avoid becoming a reporting company under federal securities laws, to limit ongoing obligations to many small shareholders or to change the equity sponsor. In addition, the parties may seek to effect the transaction 'out-of-court' due to a perception (or the reality) that bankruptcy proceedings would take longer or damage the business.

Features

The Bankruptcy Hotline Image

The Bankruptcy Hotline

ALM Staff & Law Journal Newsletters

Recent rulings of importance to you and your practice.

Features

How to Avert or Survive a Software Audit Image

How to Avert or Survive a Software Audit

Richard Raysman & Peter Brown

<i>Ed. Note: One would expect law firms to consider it beneath them to deliberately have staff members ' or those of an ancillary business ' use illegal software copies. But the potentially high cost and embarrassment that can result from even tacitly permitting violations of software licenses should merit proactive attention by firm management.</i>

Don't Pay Old Equity That Is Truly 'Under Water'! Image

Don't Pay Old Equity That Is Truly 'Under Water'!

Michael J. Sage & Mark E. Palmer

As discussed last month, the law clearly shows that parties structuring cash-out mergers with distressed debtors must focus on two things: 1) timing the debt-for-equity exchange (and the resultant debt cancellation) so not to occur prior to the merger's effective time, and 2) demonstrating that the debtor was at 'the brink of bankruptcy' at the merger's effective time. A clear record should be built and maintained on these points, and the structure should accommodate the technical legal requirements.

Exceptions to Dischargeability Image

Exceptions to Dischargeability

Chester B. Salomon

For many years, financial or securities executives knew that if they had not committed a fraud or had not been fined by the Securities and Exchange Commission (SEC), they could get a discharge in bankruptcy by filing for Chapter 7 or 11. Negligently committing a securities violation would not preclude a bankruptcy discharge for the civil liability flowing therefrom.

Insurance Assurance Image

Insurance Assurance

Bill Brennan

The insurance market is undergoing turmoil as a result of recent trends, including terrorism, corporate scandals and skyrocketing healthcare costs. Premiums are soaring, causing firms to cut back on coverage or to cut into their profits ' choices that could have a profoundly adverse impact on the firm's future success.

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