One of the requirements for an involuntary filing is that the creditors seeking relief (referred to as “petitioning creditors”) must each have a claim that is not subject to a “bona fide dispute as to liability or amount.”...more
As many in the trade are well aware, Chapter 11 debtors frequently seek bankruptcy court approval to pay the prepetition claims of vendors the debtor has deemed critical to the continued operation of its business and success...more
Section 503(b)(9) of the Bankruptcy Code gives a massive boost to creditors that sold goods to a financially distressed customer shortly before the customer’s bankruptcy filing. While claims for goods sold before a bankruptcy...more
The U.S. Bankruptcy Code allows a trustee or debtor-in-possession to claw back certain payments or transfers made to a creditor during the 90 days prior to the petition date, based on the principle that such payments unfairly...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
Nothing is more frustrating to a trade creditor holding a large unpaid balance owed by a debtor in bankruptcy than the risk that payments the trade creditor received before the debtor filed bankruptcy may be clawed back by...more
6/1/2021
/ Administrative Expenses ,
Bankruptcy Code ,
Burden of Proof ,
Chapter 11 ,
Chapter 7 ,
Commercial Bankruptcy ,
Consolidated Appropriations Act (CAA) ,
Coronavirus/COVID-19 ,
Creditors ,
Debtors ,
Financial Distress ,
Financial Solvency ,
Liquidation ,
New Value Exception ,
Ordinary Course of Business Defense ,
Perishable Agricultural Commodities Act (PACA) ,
SBA ,
Trade Credit ,
Transfers ,
Trustees ,
Vendors
Financially distressed debtors frequently use Chapter 11 to sell their businesses and assets in one or more transactions, primarily in order to pay down secured debt obligations owed to one or more lenders. In the best case,...more
Nothing is more frustrating to a trade creditor saddled with a large unpaid balance owed by a debtor in bankruptcy than being subject to the risk of having to remit back to the debtor’s estate “preference” payments received...more