Young and New Members

Bankruptcy Concerns for Hemp Companies

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.

Reaffirmation: Should It Stay or Should It Go?

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.

High Court Declines Invitation to Overrule Its 1992 Dewnsup Decision

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

Young and New Members April 2019

Young and New Members April 2019

https://www.abi.org/?unsubscribe=484330566/85b1bb95bf58cafe71249b97e89d…

The World of Bankruptcy Compensation for Key Employees

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.

Did the Fifth Circuit Make a “Hole in One” in Its Make-Whole Decision?

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.

Seven Counties Services: Is a Nonprofit Mental Health Provider Eligible to File Under Chapter 11?

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.

Young and New Members November 2018

Young and New Members November 2018

To Be or Not to Be? Counting a Wholly Unsecured Claim in a Chapter 13 Following a Chapter 7

There is a pending Ninth Circuit case to decide whether a wholly unsecured claim should count toward a debtor’s chapter 13 eligibility following a chapter 7. On April 26, 2010, Aleli A. Hernandez (the debtor) filed a chapter 7 bankruptcy case in the U.S.

Should You Rely on the BAP? Analyzing the Impact and Authority of Bankruptcy Appellate Panels

When drafting a motion or a brief, how much weight should you give an opinion of a Bankruptcy Appellate Panel (BAP)? This article discusses the variation between circuits about the BAP and highlights a selection of cases that analyze the limits of the BAP’s authority.