Business Reorganization

Valuation Will Drive the Next Wave of Chapter 11 Cases

Many professionals anticipate that valuation will be the fulcrum issue in the upcoming wave of chapter 11 cases, and creative advocacy will be at a premium.

Traditional Valuation Approaches and the Bankruptcy Code

COVID-19’s Impact on Lease Restructurings: A Look Back and a Look Forward

With the mandatory government shutdown orders, surges in unemployment affecting rental demand, prices declining and companies driven to shift their workforce to remote work, 2020 has certainly left a mark on commercial leases. The general feeling of uncertainty as we head into the New Year in the midst of COVID-19’s economic disruption is surely going to continue impacting bankruptcy retail cases.

Business Reorganization - September 2020

Rival Lender Groups Fight over the DIP Financing in the J.C. Penney Chapter 11

On March 17, 2020, in response to the COVID-19 pandemic to protect its customers and employees, J.C. Penney opted to close all of its stores and decrease supply chain operations.[1] Then, in mid-May, J.C. Penney and its affiliates (the debtors) filed for chapter 11 protection in the U.S.

Running with the Land: Texas Bankruptcy Court’s Alta Mesa Decision Undercuts Sabine, Holding That Gathering Agreements Cannot Be Rejected

In a significant recent decision in the Alta Mesa chapter 11 case,[1] Bankruptcy Judge Marvin Isgur of the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) held that the debtors’ midstream oil and gas gathering agreements constituted real property covenants “running with the land” under Oklahoma law and, therefore, could not be rejected as executory contracts under § 365 of the Bankruptcy Code.

Shaken, Not Stirred: Bondholders and Other Unsecured Claims In PG&E’s Chapter 11 Case Awarded Post Petition Interest, Not Under Contract Rate, But Under Federal Judgment Rate

On January 29, 2019, PG&E Corporation (“PG&E”) and its primary operating subsidiary, Pacific Gas and Electric Company (“Debtors”), were forced to file for bankruptcy protection as a result of disastrous wildfires that occurred in Northern California in 2017 and 2018 which gave rise to billions of dollars in liabilities against the power giant.[2]

Beware of Quarterly Fees: Statutory Amendment Increasing Fees May Apply to Pending Cases

Could your chapter 11 debtor survive if its quarterly fees increased by 833%? That may be an issue for counsel to consider following the January 9, 2020, ruling in the case of Exide Technologies.[1] Although the bankruptcy case was filed in 2013, the bankruptcy court for the District of Delaware found that the 2017 amendment to 28 U.S.C. §1930(a)(6)(B) applied to cases pending at the time of the amendment.[2] What can we learn from this case?

Business Reorganization June 2020

Section 546(e) Safe Harbor Alive and Well After Tribune

The safe harbor provision in 11 U.S.C. § 546(e) provides, in relevant part, that a trustee may not avoid a transfer “made by or to (or for the benefit of) a ... financial institution ...

Bankruptcy Courts May Approve Rejection of FERC-Approved Rates Subject to FERC Standards and Guidance

FirstEnergy[1] sells electricity to customers in six states. It commenced a chapter 11 bankruptcy case in May 2018 in which it sought to reject long-term power purchase agreements (PPAs) entered into several years prior to bankruptcy. The Federal Energy Regulatory Commission (FERC) had approved the PPAs pursuant to the Federal Power Act (FPA). Due to changes in federal regulations, FirstEnergy’s decreased need for electricity subject to the PPAs, and the declining cost of electricity, the PPAs had become money-losers for FirstEnergy.