Young and New Members

Navigating Real Property Sales under § 363

Debtors, whether a corporation or an individual, often need to divest of real estate holdings while under bankruptcy protection. Section 363 of the Bankruptcy Code provides an avenue (and often the only avenue) by which a trustee or debtor[1] in possession (DIP) may sell property of the estate.[2] Specifically, § 363(b)(1) provides that a trustee or DIP may sell property of the estate “other than in the ordinary course of business” after “notice and a hearing.”[3]

Winning Isn’t Everything: Executing on Your Bankruptcy Court Judgment May Be Limited by State Law

Football season is upon us, and in locker rooms across the country, coaches will be telling their teams, “Winning isn’t everything; it’s the only thing.”  Unfortunately for plaintiffs suing debtors in bankruptcy adversary proceedings, winning isn’t the only thing that matters. In fact, winning a judgment can be less than half of the battle. Winning a bankruptcy court adversary proceeding entitles a plaintiff to a paper judgment,[1] but most plaintiffs would rather collect on a judgment than frame it and hang it on the wall.

Are Funds Collected by a Receiver Prepetition Subject to § 543? Sometimes

The Great Recession renewed widespread use of receiverships, one of the oldest pre-judgment remedies available to creditors. What was once old has become new again, portrayed by the fact that one of the leading treatises on receiverships remains Ralph Ewing Clark’s Treatise on the Law and Practice of Receivers 3d, originally published in 1918 and last updated with a 1968-69 supplement.

Veiled Egos: Alter-Ego, Veil-Piercing and §§ 362(a) and 727(a)

Corporate veil-piercing is nearly as old as limited liability, the privilege it circumscribes.[1] Normally, limited liability conjures an image of a veil between a corporation and its owner, thereby shielding the assets of the latter, whether a natural or artificial person,[2] from the claims of the corporation’s creditors. Piercing the veil makes it suddenly diaphanous and exposes the owner to liability for any debts of the corporation.

Death Traps, Pitfalls and Safe Harbors: The Key Provisions of 11 U.S.C. § 546

When many bankruptcy practitioners think of § 546 of the Bankruptcy Code, it is in connection with the statute of limitations for avoidance actions. While these provisions may be widely known, § 546 contains several other provisions that can have a substantial impact on a party’s substantive rights in a bankruptcy case. This article highlights the various key provisions of this very important section and identifies the death traps, pitfalls and the safe harbors with respect to the same.

Defendants May Evade Fraudulent Transfer Liability If They Act in Good Faith and Provide Value

[1]On June 17, 2014, the U.S. Bankruptcy Court for the Northern District of Illinois addressed the defense to fraudulent transfer liability under § 548(c) of the Bankruptcy Code.[2] Section 548(c) provides a defense for otherwise fraudulent transfers if the transferee accepts the transfer in good faith, and provides value in exchange for such transfer.[3] Thus, there are two prongs to this defense: good faith and value.[4]

You Snooze, You Lose: Laches and the Automatic Stay

With an increasing number of bankruptcy cases centering on massive financial frauds, bankruptcy courts in recent years have drastically extended the definition and scope of “property of the estate.” Not surprisingly, this broader definition has also led to an increased application of the automatic stay, sometimes extending the stay to third-party actions that were not even brought against debtors.[1]

Cadillac in the Red? Future Claims Issues Rattle a Post-Bankruptcy GM

General Motors (GM) is currently facing two main types of lawsuits linked to its recall of cars with defective ignition switches. For those injured or killed as a result of these switches, GM has set up a special fund to compensate victims and their families.[1] Yet, the very contentious and much more expensive issue concerns car owners suing GM for economic losses related to the defects,[2] and these claims could easily reach into the billions of dollars.[3]

Bankruptcy Basics: Administration of Chapter 15 Bankruptcies

In recognition of the increasingly global nature of business, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) added a new chapter, chapter 15, to the Bankruptcy Code. It represents the U.S.’ nearly word-for-word adoption of the United Nations Commission on International Trade Law’s Model Law on Cross-Border Insolvency (the “Model Law”), which was promulgated in 1997.

Notable Distinctions Between Two Provisions Providing for the Removal of Bankruptcy-Related Litigation

^[1]“Removal” refers to the process of transferring litigation to a federal court from another forum. Bankruptcy practitioners should be aware of two provisions that provide for removal of civil litigation to federal court: 28 U.S.C. § 1441, the general removal statute, and § 1452,^[2] the bankruptcy removal provision. Since the U.S.

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