Exploring the Outer Limits of ' 363(f) Clearance
September 26, 2007
Bankruptcy offers an attractive platform for the sale of assets because it is injected with a statutory prerogative allowing for the clearance of third- party interests. Specifically, ' 363(f) of the Bankruptcy Code permits the sale of bankruptcy estate property 'free and clear of any interest [of any other entity] in such property' provided that certain conditions are satisfied. Notwithstanding that grant of authority, however, the Bankruptcy Code does not specifically define the phrase 'any interest in such property' or otherwise specify the scope of interests that the phrase is intended to cover.
The Gavel Falls
September 26, 2007
The use of bankruptcy to protect an individual's home from foreclosure is sufficiently commonplace that practitioners would be well advised to understand the foreclosure process in their state and, in particular, when that process will be deemed completed for purposes of section 1322. This article explains why.
Riding the Fulcrum Seesaw
September 26, 2007
Troubled businesses also may have turned to the distressed debt market instead of filing for bankruptcy protection due to recent changes to the Bankruptcy Code, which made bankruptcy a more complicated, expensive and uncertain alternative. As a result, when the next wave of Chapter 11 filings comes, hedge funds and other distressed debt investors will act to protect their unique interests and strategies, which will bring new dynamics to bankruptcy cases.
On the Move
August 29, 2007
Who's doing what; who's going where.
The Supreme Court Speaks in Marrama
August 29, 2007
With its Feb. 21, 2007 holding in <i>Marrama v. Citizens Bank of Massachusetts</i>, 127 S. Ct. 1105 (2007), the Supreme Court stepped in to resolve a Circuit Court split concerning a debtor's right to convert a Chapter 7 case to a Chapter 13 case under the Bankruptcy Code, pursuant to ' 706(a) of the Code. On its face, ' 706(a) seems clear ' a debtor has an absolute, one-time right to conversion. Such clarity is, in the Supreme Court's view, hazy at best.
Bankruptcy Rule 2019
August 29, 2007
Bankruptcy court procedural rulings typically go unnoticed. However, this year two bankruptcy court rulings regarding procedural disclosure requirements potentially applicable to investors participating in the bankruptcy process have caused quite a stir. Both rulings related to the scope of disclosure mandated by Bankruptcy Rule 2019, which applies to 'committees' and 'entities' that represent more than one creditor in a bankruptcy case.
Bidders Beware
August 29, 2007
The aggregate value of private equity acquisitions worldwide in 2006 exceeded $660 billion. If this number seems mind-boggling, consider that this record-breaking volume of transactions appears well on the way to being eclipsed in 2007. Even with corporate financing for leveraged buyouts harder to come by as a consequence of the sub-prime mortgage fallout, there is, by some estimates, $300 billion sitting globally in private-equity funds.
On the Move
July 30, 2007
Who's doing what; who's going where.
Insolvencies Created By Bad Actors
July 30, 2007
While the market is swimming with innovative and highly leveraged financial transactions, and many parties are enjoying sizeable gains, some of those involved in these enterprises ultimately will become insolvent. A fraction of these insolvencies will result from fraudulent investment schemes perpetrated by multiple parties acting in concert for their mutual benefit. Innocent victims, including creditors and investors, will bear the financial brunt of the insolvencies, and will be eager to recover from all parties that participated in the fraud.
Fourth Circuit Affirms Chapter 11 Dismissal
July 30, 2007
The Fourth Circuit, on June 15, 2007, affirmed the dismissal of a Chapter 11 reorganization petition filed by a tenant debtor in a commercial lease dispute. <i>Maryland Port Administration v. Premier Automotive Services, Incorporated (In re Premier Automotive Services, Incorporated).</i> As the Court of Appeals explained, the tenant had filed its Chapter 11 petition 'in order to forestall eviction on an obviously expired lease ' to prevent the [lessor] from evicting the debtor from the [lessor's] property,' seeking to tie up the landlord 'in endless, fruitless litigation.' According to the court, the Chapter 11 filing here 'demonstrate[s], unfortunately, how the good and useful ends of the bankruptcy process can be badly abused.'
