Seventh Circuit: Transfers of Nonpublic Securities Are Protected by the 546(e) Safe Harbor
The Seventh Circuit adopted a broad reading of the Section 546(e) safe harbor to dismiss a fraudulent transfer suit attacking a sale of nonpublic securities.
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Session Description
Parties in large, complex bankruptcy cases routinely retain local counsel when that party's primary counsel has no office or attorneys licensed in a particular venue. Local counsel can provide critical support in these cases--to creditors, committees, groups, and debtors--including having local knowledge, well-formed relationships in the venue, and familiarity with other professionals and the court.
But hiring local counsel can present myriad issues with retention, compensation, and, in particular, ethics. Many courts have strict rules on hiring local counsel, including some jurisdictions that require local counsel to play a substantive role in the case (as opposed to simply signing/filing pleadings), including attending all depositions and hearings. There may be many landmines waiting for both local and outside counsel, depending on the jurisdiction.
This panel would discuss the benefits of local counsel, things to avoid, and ethical/compensation related issues. The panel could consist of an attorney that often serves as local counsel, an attorney that often hires local counsel as outside counsel, and a judge that frequently sees retention of local counsel (to provide that judge's views on what works, what doesn't, and things to avoid).
But hiring local counsel can present myriad issues with retention, compensation, and, in particular, ethics. Many courts have strict rules on hiring local counsel, including some jurisdictions that require local counsel to play a substantive role in the case (as opposed to simply signing/filing pleadings), including attending all depositions and hearings. There may be many landmines waiting for both local and outside counsel, depending on the jurisdiction.
This panel would discuss the benefits of local counsel, things to avoid, and ethical/compensation related issues. The panel could consist of an attorney that often serves as local counsel, an attorney that often hires local counsel as outside counsel, and a judge that frequently sees retention of local counsel (to provide that judge's views on what works, what doesn't, and things to avoid).
Suggested Categories
Learning Outcomes
This panel would discuss the benefits of local counsel, things to avoid, and ethical/compensation related issues. The panel could consist of an attorney that often serves as local counsel, an attorney that often hires local counsel as outside counsel, and a judge that frequently sees retention of local counsel (to provide that judge's views on what works, what doesn't, and things to avoid).
Target Audience
Business
First Name
Tim
Last Name
Anzenberger
Email
tim.anzenberger@arlaw.com
Firm
Adams and Reese LLP
Session Description
The Supreme Court's June 2024 decision in Truck Insurance Exchange v. Kaiser Gypsum Company held that insurers qualified as "parties in interest" under Section 1109(b), entitling those insurers to object to a plan of reorganization. This landmark decision is likely to have far-ranging effects in the reorganization world and affect debtors and creditors committees alike. The ABI should host a panel examining the expected extent and impact of those effects, including that:
- debtors and creditors should prepare for the fact that insurance carriers will start getting a seat at the negotiating table;
- the insurance industry may view Truck as not merely granting a seat at the table, but also as an invitation to test the boundaries of its newly granted position;
- Truck presents an existential threat to the already-risky tack of chapter 11 plans' limiting director and officer liability to only insurance proceeds;
- insurance carriers will likely leverage Truck to urge courts in jurisdictions that deem insurance proceeds to be property of the estate to reexamine the status quo; and
- insurance carriers will begin to horse-trade for concessions in connection with first-day motions and debtors' purchasing tail coverage and run-off policies post-petition.
- debtors and creditors should prepare for the fact that insurance carriers will start getting a seat at the negotiating table;
- the insurance industry may view Truck as not merely granting a seat at the table, but also as an invitation to test the boundaries of its newly granted position;
- Truck presents an existential threat to the already-risky tack of chapter 11 plans' limiting director and officer liability to only insurance proceeds;
- insurance carriers will likely leverage Truck to urge courts in jurisdictions that deem insurance proceeds to be property of the estate to reexamine the status quo; and
- insurance carriers will begin to horse-trade for concessions in connection with first-day motions and debtors' purchasing tail coverage and run-off policies post-petition.
Suggested Categories
Learning Outcomes
Participants will gain knowledge and skills vital to negotiating insurance-related issues in bankruptcy, such as:
- traps for the unwary in attempting to limit liability in chapter 11 plans to only insurance proceeds;
- how to maximize or minimize Truck's reach in their next plan negotiation, depending on whether their goal is to tout or downplay its effects; and
- how to navigate coverage issues if insurance carriers are granted a seat at the table during their next plan negotiation.
- traps for the unwary in attempting to limit liability in chapter 11 plans to only insurance proceeds;
- how to maximize or minimize Truck's reach in their next plan negotiation, depending on whether their goal is to tout or downplay its effects; and
- how to navigate coverage issues if insurance carriers are granted a seat at the table during their next plan negotiation.
Target Audience
Debtor
Brandon
Lewis
blewis@reidcollins.com
First Name
Brandon
Last Name
Lewis
Email
blewis@reidcollins.com
Firm
Reid Collins & Tsai LLP
Session Description
The focus of the panel would be to identify uniquely Canadian distressed deal structures and litigation techniques that could be imported to the American restructuring practice. Would cover developments from coast to coast by including at least 3 Canadian practitioners from the West Coast, Central Canada and Quebec would be selected once the audience was determined. For example key points would be: could you get a reverse vesting order under Chapter 11?
Suggested Categories
Learning Outcomes
Practictioners will learn new techniques and strategies unique to Canada.
Target Audience
Business
First Name
Natasha
Last Name
MacParland
Email
nmacparland@dwpv.com
Firm
Davies Ward Phillips & Vineberg LLP
Session Description
Session will identify options to bankruptcy for struggling companies and explain why certain alternatives should be considered and in certain instances utilized.
Suggested Categories
Learning Outcomes
Many bankruptcy practioners are not familiar with non-bankruptcy options such as ABCs and UCC sales which in many instances are far superior to the bankruptcy option.
This session will educate the practitioner so that that individual can provide proper advice and representation for the struggling business client.
This session will educate the practitioner so that that individual can provide proper advice and representation for the struggling business client.
Target Audience
Business
Bryan
Davidoff
bdavidoff@ggirm.com
First Name
Randy
Last Name
Nussbaum
Email
randy.nussbaum@sackstierney.com
Firm
Sacks Tierney Scottsdale
Rooker-Feldman Held Not to Prevent Relitigation of a Denied Exemption
The Supreme Court’s narrowing of Rooker-Feldman is showing up in circuit court opinions.
A ‘13’ Debtor Can’t Dismiss After Conversion to ‘7,’ Tenth Circuit BAP Says
A 14-day stay under Rule 7062 might have saved the chapter 13 debtor’s right to dismiss under Section 1307(b).
Being a ‘Net Winner’ in a Ponzi Scheme Doesn’t Automatically Mean Nondischargeability
Alleging that a debtor realized an ‘impossibly high’ rate of return in a Ponzi scheme isn’t enough to state a claim of nondischargeability for ‘actual fraud.’
Small-Business Bankruptcies Surge Ahead of Potential Law Change
More small businesses filed for bankruptcy in February as some rushed to take advantage of a favorable provision in the law that is set to expire soon. Last month, as many as 213 small businesses elected to file under subchapter V of the Bankruptcy Code, a 78% increase compared with the same month a year ago, according to bankruptcy data provider Epiq, WSJ Pro Bankruptcy reported. Companies with less than $7.5 million in debt can file under a subchapter under the bankruptcy code that went into effect in 2020 as part of the Small Business Reorganization Act, offering small businesses a faster and cheaper way to restructure debt. Since then, more than 7,200 cases have been filed under the subchapter, according to the U.S. Department of Justice. Unless Congress takes action, the $7.5 million eligibility limit on subchapter V is due to sunset on June 21, when the limit could go back to the to its original amount of just over $2.7 million when it went effective in February 2020. adjusted for inflation. Last December, the ABI's Subchapter V Task Force released its preliminary report to legislators saying that the eligibility limit of $7.5 million should be made permanent. Legislation hasn’t yet been formally introduced. Eyal Berger, a bankruptcy partner at law firm Akerman who spoke about subchapter V at an American Bankruptcy Institute event, said the increase is due in part to uncertainty over what will happen to the $7.5 million debt cap in June. If the cap reverts to a lower number, fewer companies would be eligible for subchapter V. The end of government aid distributed during the pandemic and the impact of higher interest rates are also factors, said ABI President Soneet Kapila. Small businesses have begun facing repayment demands for the “economic injury disaster loans” that they received from the Small Business Administration during the pandemic, said David Cox, managing attorney at Cox Law Group. “Many of my clients weren’t ready for those additional expenses.”
