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The current landscape for cannabis companies is confusing due to the divergence between federal and state law. Under federal law, particularly under the Controlled Substances Act (CSA),[1] cannabis is a Schedule 1 controlled substance, and cannabis activities from cultivation to sale are illegal. Yet more than 30 states now have laws making those activities permissible for medical use, recreational use or both. This divergence presents tremendous challenges for the cannabis business.

A vehicle can be a debtor’s most important asset. Without one, it is particularly troublesome for a debtor because a loss of his or her vehicle may preclude continued employment.[1] Because many debtors need a vehicle, entering into a reaffirmation agreement seems the ideal and obvious choice.[2] Yet depending on the vehicle, reaffirmation may not be the best choice.

On Feb. 19, 2019, the Supreme Court considered a petition for a writ of certiorari in the case of Ritter v. Brady,[1] asking the high court to overrule its infamous decision in Dewsnup v. Timm.[2]

The Dewsnup Decision

A chapter 11 debtor’s executives might find little motivation to remain employed at a company as annual bonus plans become compromised and long-term incentive vehicles (e.g., stock options, restricted stock) become virtually worthless. As a result, it is imperative that an organization in chapter 11 implement an alternativecompensation arrangement in order to retain key executive talent and incentivize them toward the level of performance that is necessary to achieve a successful restructuring.

On January 17, the Fifth Circuit released a highly anticipated decision, weighing in on the expanding circuit split concerning the enforceability of contractual make-whole provisions in loan indentures. A make-whole provision is a contractual substitute for interest lost on notes redeemed before the expected due date.[1] The provision, commonly found in a loan indenture, is often litigated in bankruptcy when a debtor seeks to refinance debt.

Nonprofits and governments rely on each other to provide social services.[1] Governments rely on nonprofits to provide services that they cannot provide; nonprofits rely on governments to fund those services.[2] This relationship leads some to question whether a nonprofit is an instrumentality of a state and, as a result, the nonprofit’s eligibility to be a debtor under chapter 11 of the Bankruptcy Code.