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Millennium II: Third Party Releases Still Constitutionally Viable?

In business reorganizations under chapter 11, third-party releases are important tools that often facilitate consensual plans of reorganization, greater recovery for creditors, and an expedited resolution of bankruptcy cases, particularly where a debtor faces mass tort claims. However, as the bankruptcy courts’ constitutional authority to grant nonconsensual third-party releases in chapter 11 becomes subject to further attack under Stern v.

Seventh Circuit Decision Endorses Useful Tool for Applying “New Value” Defense Under 11 U.S.C. § 547(c)(4)

In Levin v. Verizon Bus. Global LLC (In re OneStar Long Distance Inc.),[1] the U.S. Court of Appeals for the Seventh Circuit recently issued an important opinion on the “new value” defense for preference actions, affirming the bankruptcy court’s “per diem” method of determining the precise amount of “subsequent new value” extended by a trade creditor on a given day during the preference period.

A Different Sort of Tax Refund: The Ninth Circuit Allows Debtors in Possession to Recover Tax Payments to the IRS Under § 544(b)

It is no secret that the IRS and other taxing authorities do well in bankruptcy, often at the frustration of both debtors and general unsecured creditors. For debtors, tax claims frequently are nondischargeable. For general unsecured creditors, IRS claims are entitled to higher priority. However, a recent decision from the Ninth Circuit Court of Appeals, In re DBSI Inc., offers new precedent that swings the balance back toward debtors and general unsecured creditors at the expense of the IRS.[1]

Tips of the Trade - When your Customer Fails

The UTC Committee hosted their January call on Thursday, the 10th, where speakers discussed (1) what to do when you get wind that your customer could be days or weeks away from a bankruptcy filing; (2) your customer files, so what first day motions should you focus on and be concerned about; and (3) you are "lucky" enough to be invited to serve on the creditors' committee - should you accept the invitation.

Third Circuit Joins Other Circuits in Holding WARN Act Exception’s Standard Is “Probable,” not “Possible”

Given the media saturation, it is virtually impossible for any American to be unaware of the allegations that Russia and President Putin interfered in the 2016 presidential elections. But only a much smaller subset of the population likely knows that Russia and then-Prime Minister Putin also played a key role in Eclipse Aviation Corp.’s bankruptcy case seven years earlier.

Physical Possession of Goods Is Required for an Administrative Expense Under § 503(b)(9)

The Third Circuit Court of Appeals recently issued an important opinion addressing the question of when goods are “received” for purposes of § 503(b)(9) of the Bankruptcy Code in In re World Imports Ltd.[1] Reversing two lower courts, the appellate court held that in determining whether a seller is entitled to an administrative expense under that section, goods are “received” when the debtor takes physical possession of the goods. Days later, the U.S.

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