The “Catch-22” of Preference Law
A debtor's non-exempt assets (and even the debtor's entire business) are commonly sold during the course of a bankruptcy case by the trustee or a chapter 11 debtor-in-possession ("DIP") as a means of augmenting the bankruptcy...more
In a March 2024 decision, the U.S. Bankruptcy Appellate Panel for the First Circuit (the “Panel”) followed existing case law prohibiting debtors in businesses related to cannabis from availing themselves of federal bankruptcy...more
Businesses in financial distress have multiple options to consider when attempting to reorganize or liquidate. A state court receivership or Chapter 7 Bankruptcy are likely options for liquidation when there are significant...more
The Fifth Circuit recently ruled that a debtor can sell a preferential transfer action under Bankruptcy Code section 363 to a purchaser that is not a representative of the bankruptcy estate. Briar Cap. Working Fund Cap.,...more
There is longstanding controversy concerning the validity of third-party release provisions in non-asbestos trust chapter 11 plans that limit the potential exposure of various nondebtor parties involved in the process of...more
The Bankruptcy Code and its predecessor statutes have long permitted bankruptcy trustees (or their equivalents) to claw back preferences, which involve transfers made on preexisting debts within 90 days (or 1 year, if made to...more
Section 363(m) of the Bankruptcy Code provides that the reversal or modification of an order approving a sale or lease of assets in bankruptcy does not affect the validity of the sale or lease to a good-faith purchaser or...more
This entry is part of Nelson Mullins’s ongoing “Bankruptcy Basics” blog series that is intended to address foundational aspects of bankruptcy for new and non-bankruptcy practitioners and professionals. This entry will discuss...more
With the recent uptick in Chapter 11 filings and a further increase expected in the coming quarters, companies across all industries would be wise to consider certain precautionary measures if a customer begins missing or...more
Because of the injunction that begins as soon as a debtor files for Chapters 7, 11 or 13 bankruptcy – called the automatic stay – creditors and collection agencies are prevented from seeking payment from the debtor....more
With the COVID-19 pandemic stretching on into another year, businesses continue to experience adverse effects. Bankruptcy filings, especially among retailers, were higher than average in 2020, and it is likely that more...more
The Small Business Reorganization Act of 2019 ("SBRA"), the Honoring American Veterans in Extreme Need ("HAVEN") Act, and the Family Farmer Relief Act were enacted into law on August 23, 2019. This alert summarizes these...more
On October 7, 2019, the United States Bankruptcy Court for the Southern District of New York confirmed Sears Holdings Corp.’s chapter 11 plan of liquidation. Sears currently owes tens of millions of dollars to its...more
On August 23, 2019, the President of the United States of America signed three new bankruptcy amendments into law. The first bill, H.R. 3311, ratifies The Small Business Reorganization Act of 2019, creating a new option for...more
Will Congress Finally Act? This is the fourth in a series of Alerts regarding the proposals made by the American Bankruptcy Institute Commission to Reform Chapter 11 Business Bankruptcies. We discuss here the Commission’s...more