Sympathy for the Debtor? Not When It Comes to Student Loans
December 02, 2019
The assumption that bankruptcy can't relieve a borrower of student loan obligations is incorrect, however a debtor must provide compelling evidence that an undue hardship will result if the debtor is required to repay the loan.
'Dirt for Debt' In Bankruptcy Plans of Reorganization
November 01, 2019
A debtor's goal in a Chapter 11 Bankruptcy is to confirm a "plan of reorganization." Creditors usually have the right to vote for or against a plan, and in some cases, a plan can be confirmed over the objection of one or more classes of creditors. This is called a "cram-down." The Bankruptcy Code's rules governing cram-down are complex and differ for secured and unsecured classes of creditors. This article shows how bankruptcy courts have ruled on a particular method of cram-down known as a "dirt-for-debt" plan.
Cannabis Businesses In Bankruptcy
November 01, 2019
Any Cannabis-Related Business or Any Business In a Relationship With One Will Likely Find Itself Barred from the Door of the Federal Bankruptcy Courts
The ability to file a federal bankruptcy case is an important resource for struggling businesses. It is particularly important to start-up businesses in an emerging field, such as the production and marketing of cannabis-related products. It is precisely this resource, however, that is currently being denied to cannabis-related businesses.
D&O Policy 'Bankruptcy Exclusion' Held To Be an Unenforceable 'Ipso Facto' Clause
November 01, 2019
The new decision is significant because lawsuits against former (and current) officers and directors of debtors commonly are brought, as here, by trusts established under plans of reorganization. Because insurance policies often are the only viable source of recovery for the claims asserted in such lawsuits, this decision potentially opens a pathway to creditor recovery in other similar matters.
Faster, Shorter, Smarter, Better: Strategies for a New Era of Bankruptcy
November 01, 2019
Faster, Shorter, Smarter, Better
Among other trends, practitioners are increasingly using pre-packaged and pre-negotiated cases, drafting clearer and more concise pleadings, employing smarter deposit management practices, and harnessing improved technology — strategies for a new era of bankruptcy.
Same Class, Different Recoveries — No Bar to Plan Confirmation
November 01, 2019
Equal treatment of claims in the same class within a plan of reorganization is an important creditor protection in Chapter 11. However, is it possible to provide certain benefits to some creditors within a single class and not others without running afoul of the Bankruptcy Code? In a recent ruling on an issue of first impression, the U.S. Court of Appeals for the Eighth Circuit certainly made clear it thought so.
Fifth Circuit Subordinates Claim for Deemed Dividends
October 01, 2019
"… [P]ayments owed to a shareholder by a bankrupt debtor, which are not quite dividends but which certainly look a lot like dividends, should be treated like the equity interests of a shareholder and subordinated to claims by creditors of the debtor," held the U.S. Court of Appeals for the Fifth Circuit.
8th Circuit Affirms Dismissal of Lawsuit Attacking Approved Bankruptcy Sale
October 01, 2019
Sales of substantially all of a debtor's assets are commonplace in corporate Chapter 11 bankruptcies. The sale is supervised and approved by the Bankruptcy Court. Purchasers desire to know that if the sale is consummated, they will be protected from subsequent attacks on the sale and the sale process and presumably more bidders will participate, resulting in greater returns for the estates and creditors. Issues surrounding the finality of a bankruptcy sale were recently reviewed by the U.S. Court of Appeals for the Eighth Circuit.
Something to Remember: The Flexibility of Chapter 11 in Retail Situations
October 01, 2019
In the face of increasing pressure from online retailers, and declining foot-traffic in malls and other brick-and-mortar locations, distressed retailers like Things Remembered need to act expeditiously to execute going-concern transactions if they are going to survive the market disruption.
