Business Reorganization

Beware When Buying Claims

In the multi-billion-dollar claims-trading market, your offer and acceptance might not be what you thought it was. While the bankruptcy court in its recent decision In re Westinghouse Electric Company LLC et al.[1] would not establish terms of custom in the industry of claims trading, especially when dealing with nonindustry players, the bankruptcy court did provide guidance as to what would not constitute a binding agreement or a Type II contract.

Debtor in Possession May Modify Executory Contract Without Court Approval

Imagine that Hal Steinbrenner agreed to purchase the Boston Red Sox from John Henry, Tom Werner and Larry Lucchino. All three signed non-compete agreements promising to buy no interest in an MLB team for the next five years. Steinbrenner made a $1 billion down payment, and MLB Commissioner Rob Manfred signed off on everything. But shortly after all the parties signed the final contract, Steinbrenner filed a bankruptcy petition.

District Court Confirms Bankruptcy Jurisdiction to Grant Third-Party Releases: In re Millennium Labs Holdings, II LLC

Third-party releases can be an integral part of a chapter 11 bankruptcy case. These releases can have the effect of a nonconsensual resolution of state law claims, and a question exists as to how they are implicated in a Stern v. Marshall analysis. In the fourth opinion issued by the district court in the Millenium Labs Holdings II LLC bankruptcy,[1] Judge Leonard P.

Business Reorganization July 2018

Trading Up: Improving the Trade Creditor’s Lot Vis-à-Vis the Secured Lender

A seller of goods who enjoys a casual relationship with a buyer — without adhering to strict documentation and enforcement standards — can find itself in dire straits in the event of that buyer’s insolvency. Many sellers operate without agreements and rely on purchase orders and invoices to document their customer relationships, and may also fail to investigate potential security interests that might prime those sellers’ interests in delivered goods come the buyer’s insolvency.

Franchise Servs. of N. Am. v. U.S. Trs. (In re Franchise Servs. of N. Am.): Fifth Circuit Punts on Golden Share Issues

In Franchise Servs. of N. Am. v. U.S. Trs. (In re Franchise Servs. of N. Am.),[1] the Fifth Circuit Court of Appeals, on direct appeal from the U.S. Bankruptcy Court for the Southern District of Mississippi, affirmed the dismissal of a bankruptcy case where the debtor company failed to obtain the requisite consent from shareholders as required under its corporate charter.

Real Estate Sales Free and Clear of Unexpired Leases Under § 363(f)

Editor's Note: ABI's latest video podcast features ABI Deputy Executive Director Amy Quackenboss talking with David R. Kuney of Whiteford Taylor Preston (Washington, D.C.).

Bankruptcy and Filing the 10-K: A Descriptive Study of Public Company Bankruptcy Filings

When a firm files for bankruptcy, someone loses a financial investment. Whether the filing is chapter 7 or chapter 11, creditors may get only a portion of a return (or none) of their investment, and investors may well lose their entire investment. However, filing for bankruptcy does not mean that a firm goes out of business.

Reconciling the Conflicting Fiduciary Duties of a Nonprofit Corporation in Chapter 11

Like their for-profit counterparts, nonprofit corporations face a variety of challenges throughout their corporate life cycles, some of which may lead an organization to pursue reorganization under chapter 11 of the Bankruptcy Code.[1] One of the issues that arises during a nonprofit’s reorganization is whether its board of directors must continue to act pursuant to their fiduciary duties of care, loyalty and obedience under state law or must maximize the value of the bankruptcy estate for its creditors.[2]

Business Reorganization May 2018

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