Commentary: Restrictions on Bankruptcy Filings Can Be Effective Under Appropriate Facts*​​​

In In re 301 W North Avenue, LLC, No. 24-B-2741, 2025 WL 37897, __ B.R. __ (Bankr. N.D. Ill. Jan. 6, 2025), the U.S. Bankruptcy Court for the Northern District of Illinois (Judge David D. Cleary) granted a secured lender's motion to dismiss a chapter 11 case for cause based on lack of corporate authorization to commence the bankruptcy proceeding, according to a Reuters commentary. The debtor's limited liability company agreement included provisions, added at the behest of the secured lender, that precluded the debtor from filing for bankruptcy without its independent manager's consent, but the independent manager had not consented to the filing. The court ultimately enforced the consent provision because the independent manager had fiduciary duties to the debtor itself and was required to consider the interests of the debtor's members and the debtor's constituents in matters on which the independent manager voted. The decision is an important reminder for secured lenders and potential debtors alike that, while some restrictions on a debtor's ability to file for bankruptcy are void as against public policy, carefully drafted provisions will be enforced. Read more.

*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI. 

Texas A&M School of Law Wins 33rd Annual Conrad B. Duberstein National Moot Court Competition​​​

Texas A&M School of Law won the 33rd Annual Conrad B. Duberstein National Bankruptcy Moot Court Competition, held March 1-3 in New York City. The competition is co-sponsored by the American Bankruptcy Institute (ABI) and St. John’s University School of Law. Fordham University School of Law took second place in the competition, and teams from UC Law San Francisco and the University of Kansas School of Law shared third-place honors. Lincoln Memorial University Duncan School of Law won for Best Brief, and Marissa Wakhu of Texas Southern University-Thurgood Marshall School of Law won the Best Advocate award. Read more.

Subchapter V Experiences to Share? ABI Wants to Hear from You!

ABI is continuing its study of Subchapter V, and it needs your help! We are particularly interested in learning more about the real-world impact of Subchapter V. So our question is, do you have a story about a distressed business or creditor who has used or benefited from the subchapter? If so, could that case still happen under the lower debt cap for Subchapter V debtors? Any and all responses are welcome. Submit your story at https://abi.org/subvstories.
 

Analysis: Private Credit Eyeing Rescue Financing and Seeing Stress Signs​​​

Private credit lenders are preparing for the next phase of the credit cycle: distress, according to a Bloomberg News analysis. TCW Group Inc. is deploying record amounts of capital to rescue finance in response to the fact that private markets are starting to see signs of stress, according to Chief Executive Officer Katie Koch. There are signs of “excess,” Koch said, or clues that distress is inching into the market. While defaults in private credit haven’t markedly risen, signals of stress, such as lenders offering extensions to maturing loans, are appearing and are new territory for private credit firms, Koch added. Given that private credit’s meteoric rise into a $1.6 trillion market mostly happened while rates sat at close to zero, many of its largest players haven’t weathered a true recession. “More people have seen Bigfoot in the last decade and a half than a business cycle, and that means a lot of us are to some degree asleep,” said Jonathan Lewinsohn, the co-founder and managing partner of Diameter Capital Partners. Restructurings have inched up in the market over the last few months. Private lenders completed a deal this week to take control of Alacrity Solutions and restructure its debt, while another borrower, Zips Car Wash, has filed for bankruptcy with a plan to hand over its business to lenders. Read more.

U.S. Weekly Jobless Claims Fall More than Expected​​​

The number of Americans filing new applications for unemployment benefits fell more than expected last week, suggesting that the labor market remained stable in February, although turbulence lies ahead from tariffs on imports and deep government spending cuts, Reuters reported. Initial claims for state unemployment benefits dropped 21,000 to a seasonally adjusted 221,000 for the week ended March 1, the Labor Department said on Thursday. Applications surged in the prior week amid snowstorms in many parts of the country and difficulties adjusting the data for seasonal fluctuations around the Presidents Day holiday. A separate unemployment compensation for federal employees (UCFE) program, which is reported with a one-week lag, showed an increase amid mass layoffs of probationary federal government workers, fired by tech billionaire Elon Musk's Department of Government Efficiency. Read more.

Register Today for ABI's Annual Spring Meeting Before the Early Bird Rate Expires Tomorrow!​​​

Distinguished experts will be discussing the top issues facing the restructuring profession during ABI’s 2025 Annual Spring Meeting, being held at the Marriott Marquis Washington, DC in Washington, D.C., April 24-26. ABI’s largest annual conference features timely concurrent sessions tailored for both commercial and consumer practitioners. Sessions will kick off with a look at the economic impact of current trends in politics and policies, navigating AI and bankruptcy, subchapter V and much more. The conference will also feature a special luncheon with ABI Editor-at-Large Bill Rochelle, who will be delving into his “Top 10” articles from his namesake column, Rochelle’s Daily Wire. Early bird savings on registration expire after tomorrow, so be sure to register today. Read more.

New GOP Bill Aims to End ‘Debanking’ of Crypto Companies and Conservatives​​​

The leader of the Senate Banking Committee wants regulators to stop worrying about customers causing reputational damage to banks, the Wall Street Journal reported. Sen. Tim Scott (R-S.C.) says that concern is fueling “debanking,” where banks allegedly avoid certain businesses. That issue has gained attention thanks to the advocacy of crypto companies and recent remarks by President Trump, who called out Bank of America and JPMorgan Chase for closing conservatives’ bank accounts. Scott plans to introduce a bill today that would end regulatory oversight of so-called reputational risks, calling the bill a first step toward ending discrimination against clients. Eleven other Republican senators are co-sponsoring the bill. The path forward for Scott’s bill might prove less fraught than other Republican proposals around the alleged discrimination trend. One of those, a bill by Sen. Kevin Cramer of North Dakota that Scott has co-sponsored, would essentially require banks to do business with all creditworthy and legally compliant customers. Some banks and industry groups have pushed back on that proposal, saying it encroaches on their right to decide with whom they do business. (Subscription required.) Read more.

Analysis: The Titans Battling for Control of the Crypto Future​​​

Giancarlo Devasini is the main owner of Tether, whose eponymous digital dollar is an indispensable part of the cryptocurrency industry. Tether’s centrality has earned Devasini tremendous wealth and vast influence over the sector, and the support of a top ally of President Trump. Critics say Tether has become the tool of choice for criminal groups to spirit money around the globe. Out to disrupt his business empire is Jeremy Allaire, founder of Tether’s archrival, Circle, which issues its own so-called stablecoin, called USD Coin, or USDC. Devasini has told business associates that Circle is bad-mouthing Tether to politicians and whipping up enforcement actions against his company. They said that in his view, Circle wants to turn the industry into just another regulated corner of finance, while Devasini wants crypto to stay true to its swashbuckling, anti-establishment roots. The fight is over the future of the $3 trillion crypto industry. The pro-crypto Trump administration is meant to usher in a golden age for the sector, and on Sunday, Trump announced the formation of a crypto strategic reserve. But in reality, the call to bring crypto into the mainstream through government regulation has opened up a kill-or-be-killed battle among crypto players. (Subscription required.) Read more.

Access All Current ABI Titles Through ABI’s New Digital Book Subscription!​​​

One of the best collections of bankruptcy books is now available as an annual digital subscription! ABI’s bankruptcy library opens the door to a constantly evolving area of the law, and our books are continually being updated by top industry professionals. Auto-renewing annual subscriptions guarantee immediate access to this invaluable resource, which is comprised of fully searchable content that’s always available on any digital device. Convenient pricing plans for individual and institutional subscribers offer immediate and unlimited access to our entire digital library of books — nearly 100 treatises! Plus, you get advanced access to new and revised books as soon as they are published — all included in your annual subscription. Learn more!

Have an Idea for a Topic for an ABI Conference Session? Submit Your Proposal via ABI’s “Call for Abstracts” Page!​​​

ABI has launched an online portal for professionals to submit proposals for educational sessions at future ABI conferences. Submitters can describe their proposed topic, outline the session’s focus and learning goals, suggest speakers, and provide contact information via the portal’s detailed form. The portal can be accessed here.

All submissions will be reviewed by an internal Education Committee, which will contact the submitter to ask questions as needed and to discuss the status of the proposal. Submissions will be reviewed on a rolling basis.

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