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The Ninth Circuit Court of Appeals recently joined the Seventh Circuit in adopting what it referred to as the “minority rule” in holding that a free-and-clear sale of property under § 363(f) of the Bankruptcy Code strips a tenant of its statutory right to remain in the premises notwithstanding rejection of the lease pursuant to § 365(h) of the Bankruptcy Code in In the Matter of Spanish Peaks Holdings II, LLC.[1]
On Feb. 21, 2018, the Delaware Bankruptcy Court in Stanley Jacobs Production Ltd. v. 9472541 Canada Inc., et al.[1] ruled that debtors seeking permission to assume or reject a contract under § 365 of the Bankruptcy Code must file a motion to do so, and assumption or rejection “impliedly” through circumstances or by conduct does not suffice.
With the continuing uncertainty in health care markets, many health care providers (or those that represent health care providers) need to consider potential reorganization pitfalls. Since many of these providers (if not all) are Medicare participants, one important aspect of any reorganization strategy will be determining the role that the federal government will play. Specifically, it is important for providers to know what the government can and cannot do as it relates to Medicare reimbursements and its ability to recoup or set off previous Medicare overpayments.
A recent decision from a Texas bankruptcy court provides an important roadmap for health care debtors seeking to bind the Centers for Medicare and Medicaid Services (CMS) to confirmed chapter 11 plans. CMS is the federal agency that administers the Medicare program and, in cooperation with the various states, the Medicaid program.
The Affordable Care Act (ACA) has been a political lightning rod since its enactment in 2010. It has been the focus of numerous legal challenges in the courts and endless dispute in Congress. One of the more controversial components of the ACA is the employer mandate, which requires employers with an average of 50 or more full-time equivalent employees to offer health insurance or potentially pay a penalty.
Health care businesses are seeking bankruptcy relief in increasing numbers.[1] Often, company assets are sold pursuant to § 363 of the Bankruptcy Code.[2] Such sales benefit not only the debtor’s creditors, but also the community — providing for the continuation of medical care, especially in rural areas where health care options are limited. Beyond the normal bankruptcy sale issues, many federal and state regulatory issues arise.
