The Interplay Between Vendor Finance Agreements and Bankruptcy
July 01, 2022
While regularly used among lenders, manufacturers, and dealers, treatment of Inventory financing program agreements in bankruptcy is not uniform, and uncertainty exists with respect to how such agreements may be treated in the context of a manufacturer's Chapter 11.
Preferred Equity In Peril?
June 01, 2022
Two Recent Cases Shed Light on Potential Risks to Preferred Equity Holders in Chapter 11
Preferred equity is a varied and flexible instrument, but, in practice, it typically has a limited number of common features. One feature is that it is entitled to a "liquidation preference" ahead of common stock. Whether the liquidation preference of preferred equity entitles preferred shareholders to priority over common shareholders in a Chapter 11 reorganization is a question that figured prominently in two recent high profile cases.
Seventh Circuit Bars Bad Faith Asset Buyer Protection
June 01, 2022
"Good-faith purchasers enjoy strong protection under [Bankruptcy Code] §363(m)," but the silent asset buyer ("B") with "actual and constructive knowledge of a competing interest" lacks "good faith," held the U.S. Court of Appeals for the Seventh Circuit.
Why Subchapter V Is More Appealing Than Chapter 11 for Small Businesses
June 01, 2022
The Small Business Reorganization Act created a new pathway for small businesses to remain in control of running their businesses, which is the usual reason for choosing to seek relief under Chapter 11, while eliminating many of the reasons that typical Chapter 11 proceedings exhausted the patience, and wallets, of both debtors and creditors.
Why Bankruptcy Attorneys Need to Help Their Clients Face Distressed Assets Now
May 01, 2022
Cyclical challenges in the economy are nothing new to bankruptcy attorneys and their clients, and 2022 is shaping up to be that kind of year for business owners nationwide. This is likely to result in a greater need for the services of bankruptcy attorneys as business owners face a mounting wave of distressed financial assets.
Fifth Circuit Resolves 'Clash' Between FERC and Bankruptcy Courts
April 01, 2022
A Chapter 11 debtor's "rejection [(under Code §365(a)] of a filed-rate [natural gas] contract … relieve[d] it of the obligation to continue performance absent the approval of FERC [(the Federal Energy Regulatory Commission]," held the U.S. Court of Appeals for the Fifth Circuit.