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The U.S. Court of Appeals for the Third Circuit recently provided guidance to practitioners representing suppliers and materialmen looking to secure their otherwise unsecured debt through the filing of a mechanic’s lien following the bankruptcy of a contractor.

Editor's Note: For a new decision upholding a gift plan despite Jevic, see In re Nuverra Environmental Solutions Inc., 17-1024 (D. Del. Aug. 3, 2017), analyzed in Rochelle's Daily Wire on August 9, 2017.

One of my very favorite things about bankruptcy practice is that it seems that for every decision from any particular court, you can usually find another decision from another court holding to the contrary. Divergent bankruptcy decisions often result from nuanced facts particular to the specific case. The differences between bankruptcy decisions, therefore, are sometimes more accurately characterized as “superficial” differences.

One of a plan proponent’s primary tasks in the confirmation process is seeking the acceptance of creditors whose claims would be impaired under the proposed plan. The Bankruptcy Code’s list of prerequisites for confirmation includes the requirement that each class of claims either “has accepted the plan” or “is not impaired under the plan.”[1] The Bankruptcy Code contains one exception to this requirement: The court may confirm a plan over the dissent of one or more impaired classes if the plan meets the cramdown requirements of § 1129(b).

Bankruptcy trustees often find that by the time a case has commenced, potential fraudulent transfers are already so far in the past that they are beyond the reach of the two-year look-back period under § 548 of the Bankruptcy Code. When that happens, a trustee can turn to Bankruptcy Code § 544(b), which allows him or her to stand in the shoes of “a creditor holding an unsecured claim” and assert whatever rights that creditor may possess under “applicable law” to avoid fraudulent transfers made by the debtor.

In In re Clark,[1] the Bankruptcy Appellate Panel for the Ninth Circuit affirmed a bankruptcy court’s determination to substantively consolidate an individual’s chapter 7 bankruptcy estate with the assets of a non-debtor limited liability company ranch and a trust that the debtor controlled.