In Mexico, only business debtors, trusted estates, and legal entities that are incorporated under mercantile laws are eligible to file for bankruptcy. The most common commercial companies incorporated in Mexico are Sociedad Anónima (limited liability stock corporations) and Sociedad de Responsabilidad Limitada (limited liability partnerships), which are governed by the Ley General de Sociedades Mercantiles (General Commercial Companies Law).
The increasing size and complexity of modern corporations has contributed to a growing necessity for directors’ and officers’ (D&O) liability insurance policies.[1] It is well-settled that when a corporation goes into bankruptcy, D&O insurance policies themselves are property of the bankruptcy estate and thus subject to the automatic stay.[2] However, there is disagreement among the courts on whether the proceeds of these insurance policies should be classified as property of the estate.
Directors have an unyielding fiduciary duty to protect the interests of the corporation and the stockholders alike. Claims for breaching this duty could result in personal liability and a large money judgment.
There are two main types of defenses to claims for breach of the duty of care: (1) defenses as to liability (e.g., business judgment rule, statute of limitations, and lack of standing) and (2) defenses as to the amount of damages. This article provides a synopsis of both defenses.
A. MOST COMMON DEFENSES AS TO LIABILITY
The latest issue of the ABI Bankruptcy Litigation Committee Newsletter spotlights issues prevalent in healthcare bankruptcies. The newsletter features articles on: (1) the circuit split on Medicare; (2) compelled reimbursement of payments
The Code requires the court to appoint a patient care ombudsman (PCO) in every case under chapters 7, 9 and 11 where the debtor is a health care business,[1] unless the court makes a finding that such an appointment is not necessary for the protection of patients.[2] The decision of whether to make such an appointment is significant: It can impact patient safety, administrative costs and the likelihood of success of the case.
Two recent decisions involving health care companies demonstrate how reorganization under chapter 11 of the Bankruptcy Code[1] can be used to manage large liabilities. Chapter 11 contains the provisions of the Bankruptcy Code that authorize bankruptcy courts to approve reorganization plans so that companies can continue in business with relief from life-threatening claims. Jurisdiction over bankruptcy matters is conferred on the U.S. district courts, which have the authority under 28 U.S.C.
The lifeblood for many hospitals is the prompt reimbursement by Medicare and Medicaid programs for services provided; this is particularly true for nonprofit providers.[1] As a result, the ability to compel reimbursement payments from the Centers for Medicare and Medicaid Services (CMS) or local and state Medicaid providers through the bankruptcy court has emerged as a significant issue for health care providers in financial distress.[2] In a recent decision, True Health Diagnostics LLC v.
The COVID-19 pandemic is straining already-troubled hospitals and other health care providers. Many will seek refuge in chapter 11, and bankruptcy courts nationwide will be called upon to adjudicate a host of issues, many time-sensitive, as health care providers struggle to provide services. Disputes regarding transferability of critical Medicare provider agreements are inevitable. Unfortunately, there is no judicial consensus on Medicare-related bankruptcy law, including the existential question of jurisdiction.