'Redemption Option Value'
April 02, 2015
On Dec. 8, 2014, the American Bankruptcy Institute Commission to Study the Reform of Chapter 11 issued its 2012-2014 Final Report and Recommendations (the Report) proposing numerous changes to Chapter 11 of the Bankruptcy Code. This article focuses on the Commission's proposal to compel senior creditors to pay a mandatory "tax," or so-called "redemption option value" (ROV), to junior stakeholders.
ABI Bankruptcy Reform
April 02, 2015
The ABI Commission recently recommended decimating the concept of adequate protection for cash flow lenders and protecting their interest only to the extent of foreclosure value. According to the authors, this recommendation has no regard for the fact that cash flow loans are predicated on a sale of the business as a going concern or the practical difficulty in attempting to choose a value based on a hypothetical sale.
A Tale of Two LLPS Sets a New Precedent
February 28, 2015
A look at the bankruptcy court's most recent ruling in the Dewey & LeBoeuf bankruptcy. The ruling establishes a bold, new, and much-needed precedent as to the interaction between state laws of business organization, and important provisions of the Bankruptcy Code.
Creditors' Rights in Chapter 11: Use Them or Lose Them
February 28, 2015
The old adage "use it or lose it" applies at every stage of a Chapter 11 case.Nowhere is this seemingly harsh ' but essential ' reality more evident than in the ongoing saga of a group of three holders of gift cards, totaling $225.00 in value, issued by the now-defunct Borders bookstore chain.
Trademark Licensees May Be Able to Have Their (Cup)Cake and Eat It, Too
January 31, 2015
Following a recent line of high-profile and notable decisions that have sought to protect the rights of trademark licensees in a trademark licensor's bankruptcy, the United States Bankruptcy Court for the District of New Jersey has issued a significant decision that, for the first time, extends the protections of Section 365(n) of the Bankruptcy Code, 11 U.S.C. ' 365(n), to trademark licensees on equitable grounds.
IP Licenses In Bankruptcy
January 31, 2015
When a licensor hits the skids, a licensee's two primary concerns should include: 1) whether the protections afforded by Bankruptcy Code section 365(n) are available if the debtor-licensor rejects the license; and 2) protecting its rights if the debtor-licensor seeks to sell the intellectual property. .
Secured Lender Primes Earlier Federal Tax Lien
January 31, 2015
The Fourth Circuit, recently held in a split decision that a lender's unrecorded lien primed an earlier unrecorded federal tax lien on a Chapter 11 debtor's real property. The case reassures secured lenders unaware of a borrower's preexisting tax lien, however, as it protects them against the government's nondisclosure.
Balancing the Equities in Municipal Bankruptcies
December 31, 2014
When it comes to explaining what has prompted the incidence of financial distress being experienced by an increasing number of our nation's cities, perhaps the most persistent and significant cause is a troubled city's obligations to fund substantial pensions for its employees, both retired as well as its active work force.
Court Expands Use of Average Lateness Methodology
December 31, 2014
Two recent decisions from the United States Bankruptcy Court for the Southern District of New York affirmed the use of "average lateness" methodology to examine both the subjective and the objective components of the ordinary course of business defense to preference actions. This article discusses the significance of these decisions.
