While things worked out for vendors who did not file a UCC-1 in the Sports Authority Chapter 11, you may not be so lucky.
Never assume that it is not necessary to properly perfect a consignment arrangement by filing a...more
2/24/2022
/ Article 9 ,
Bankruptcy Code ,
Chapter 11 ,
Commercial Bankruptcy ,
Creditors ,
Debtors ,
Inventory ,
Liens ,
Sports Authority ,
Uniform Commercial Code (UCC) ,
Vendors
Boeing's Board of Directors Settled a Caremark Claim Lawsuit with Shareholders for $225 Million Over the Crash of Two 737 Max Jetliners-
Board members who neglect risk oversight, in turn, risk exposure to lawsuits via...more
One of the fundamental principles of corporate law is that the owners, directors and officers of a corporate entity generally are not personally responsible for the entity’s debts. Without this insulation from personal...more
1/26/2022
/ Creditors ,
Employee Retirement Income Security Act (ERISA) ,
Family Businesses ,
Fiduciary Duty ,
Financial Statements ,
Fraudulent Conveyance ,
Insolvency ,
Loans ,
Personal Liability ,
Secured Debt ,
Shareholders ,
Trust Funds
It is common that accountants seek to limit their liability to a client in the event of malpractice. Typically, in the retention agreement, the liability is limited to the amount of fees paid by the client to the accounting...more
1/14/2022
/ Accountant Malpractice ,
Accounting ,
Bankruptcy Court ,
Chapter 11 ,
Debtors ,
Exculpatory Clauses ,
Financial Adviser ,
Gross Negligence ,
Liability Insurance ,
Limited Liability ,
Liquidation ,
Trustees ,
Willful Misconduct
How should a chapter 11 debtor’s financial information be presented to the bankruptcy court to create the best first impression? To give the court an accurate picture of the results of operations during Chapter 11 and for the...more
Actions Against Directors, Officers Common After Chapter 11 Bulk-Asset Sales Leave Nothing to Recover-
In the event of Chapter 11 Bankruptcy, creditors often look to recover funds by individually targeting directors or...more
The issue of venue reform has been debated for many years and is again being revisited in light of the expected surge in bankruptcy cases in the wake of the COVID-19 pandemic and certain recent large Chapter 11 filings,...more
The pandemic has hurt many companies. Fortunately, at the urging of the Federal government and with relief from regulators, many secured lenders have refrained from taking action against borrowers in default under the terms...more
In a historically low interest rate environment, where can you find returns in the double digits? Surprisingly, the answer is in chapter 11 bankruptcy cases as a “DIP” (debtor in possession) lender.
DIP Loans Can Be...more
As we enter year two of the COVID-19 pandemic, the number of new Chapter 11 cases being commenced has slowed to a trickle. But the cycle will turn again. There are always companies that lose a major customer, fail to adapt to...more
In spring 2020, the CARES Act placed a partial moratorium on residential evictions across the country. The order prohibited residential landlords nationwide from evicting certain tenants. On Sept. 1, 2020, the Centers for...more
7/15/2021
/ CARES Act ,
Centers for Disease Control and Prevention (CDC) ,
Chapter 11 ,
Coronavirus/COVID-19 ,
Eviction ,
Landlords ,
Moratorium ,
Rental Income ,
SCOTUS ,
Small Business Reorganization Act of 2019 (SBRA) ,
U.S. Treasury
Recently, a materially revised Chapter 11 restructuring plan of reorganization was negotiated, in part, by a purportedly independent special committee of the board of Purdue Pharma LP.
Originally published in Law360 July...more
Expedited Chapter 11 bankruptcies are on the rise because they save money and because key constituents such as bank lenders and bondholders recognize that the more time that a debtor spends in Chapter 11, the more likely the...more
With Covid-19 wreaking havoc on global supply chains, vendors continue to face some difficult choices. Modifying the credit terms of contracts with struggling customers and even withholding credit is probably prudent. It’s...more
It has been quite the year. We are experiencing a once-in-a-lifetime economic recession as a result of a pandemic, and we are not done yet. There appears to be a time lag between the pandemic and its fully felt impact on real...more
5/3/2021
/ Bankruptcy Court ,
Brick-and-Mortar Stores ,
Business Closures ,
Coronavirus/COVID-19 ,
Debtors ,
Equitable Relief ,
Federal Reserve ,
Foreclosure ,
Hedge Funds ,
Private Equity Funds ,
Real Estate Market ,
Remote Working ,
Restructuring
Who’s To Blame?
Lenders may seek to replace or diminish the role of one or more members of the “C suite” in order to shift blame and to demonstrate up the chain of command that they have taken appropriate action. One...more
There is great fear and uncertainty in the market. Retailers and restaurateurs have been reeling from the inability to serve customers. Curbside pickup and home delivery do not compensate. Oil and gas bankruptcies also are...more
Borrowers should not be surprised when their lender requests a “checkup,” financial review, or audit.
Lenders are nervous. Despite long-term institutional relationships with customers, many banks are seeking to reduce...more
8/12/2020
/ Audits ,
Banking Sector ,
Banks ,
Borrowers ,
Chapter 11 ,
Collateral ,
Coronavirus/COVID-19 ,
Financial Institutions ,
Financial Planning ,
Forbearance Agreements ,
Hospitality Industry ,
Insolvency ,
Lenders ,
Loans ,
Perfected Security Interest ,
Risk Assessment
As more companies file for Chapter 11 amid the pandemic, expect to see more filings focus on reducing labor, legacy and environmental costs as key to a successful reorganization.
This theme will come from debtor management...more
What makes the current economic crisis unique is that it is systemic. Despite businesses historically being well managed, not being overly leveraged, innovating in the marketplace and not facing a large litigation judgment,...more
With COVID-19 having shut down many businesses, lenders increasingly are worried about their borrowers’ ability to repay loans. Lenders are concerned about the value of their collateral because of the loss of the spring...more
6/11/2020
/ Borrowers ,
Collateral ,
Coronavirus/COVID-19 ,
Financial Distress ,
Lenders ,
Loan Agreements ,
Midsize and Large Business Loans ,
Participation Agreements ,
Recharacterization ,
Small Business Loans ,
Subordination
One well-known and painful irony of COVID-19 is that many hospitals across America are struggling, even as healthcare has arguably never been more important.
These hospitals face an array of problems — from a reduction in...more
The Federal bank regulators which supervise banks have made a statement encouraging workouts necessitated by the coronavirus. Loans which would otherwise be classified as TDRs (Troubled Loan Restructurings) will not have to...more
Periods of uncertainty and distress create many questions that businesses must answer. Will they have the human resources and materials with which to produce goods and perform services for your customers? Will their customers...more
Now is the time to be extra vigilant and to carefully watch over the creditworthiness of your customers. Assume that all of your customers are in, or soon will be in, financial distress. If they have not called you yet to...more