Is bankruptcy the new “black” in the retail industry? With the rise in retail bankruptcies, some commentators believe repeat chapter 11 bankruptcy filings are the “hottest 2017 retail trend.”[1] “Chapter 22” is the designation given to these repeat filings.
In July 2016, the Seventh Circuit issued its decision in FTI Consulting v. Merit Mgmt. Grp. LP (FTI). There, the appellant asked the court to review the application of 11 U.S.C. § 546(e) (the safe harbor), which protects settlement payments made “by or to (or on the behalf of)” a broad range of financial institutions, intermediaries and brokers (collectively, financial actors) from many types of avoidance actions.
2016 was a busy year for the Business Reorganization Committee. We have an active and involved membership base, and took part in multiple panels, newsletters, publications and networking. We have terrific plans for 2017 and beyond in support of you, our members, in the arena of business reorganizations.
The topic of the most recent Commercial Fraud Committee call, discussed the Uniform Voidable Transactions Act (UVTA), formerly named the Uniform Fraudulent Transfer Act (UFTA), which was amended (and retitled) in 2014 for the first time since its creation in 1984. According to the Uniform Law Commission, the amended Act, which strengthens creditor protections by providing remedies for certain transactions by a debtor that are unfair to the debtor’s creditors, addresses a small number of narrowly-defined issues and is not a comprehensive revision of the Act.
Business Reorganization September 2016
On June 30, 2016, the U.S. Bankruptcy Court for the Southern District of New York issued yet another decision around the Johns-Manville asbestos litigation. Before the court was Graphic Packaging International’s emergency motion to enforce the confirmation and channeling orders in the Johns-Manville Corp. (“Manville”) and the Manville Forest Products Corp. (“MFP”) chapter 11 cases. The motion sought to enjoin an asbestos-related lawsuit brought in Louisiana state court against Graphic, the successor of MFP.
The “safe harbor” under § 546(e) of the Bankruptcy Code continues to be a “hot topic.” The safe harbor is often invoked by shareholders to protect their “settlement payments” in a leveraged buyout (LBO).
In 2009, General Motors (“Old GM”) commenced an historic chapter 11 case. With federal government backing, Old GM sold the bulk of its business and assets “free and clear” of liabilities to the new entity (“New GM”) predominantly owned by the U.S. Treasury, emerging from chapter 11 in just 40 days. In the contentious aftermath, courts have continued to grapple with issues arising from the case. On July 13, 2016, a Second Circuit panel reversed in part a decision by the U.S.
Business Reorganization June 2016
Business Reorganization May 2016