The “Catch-22” of Preference Law
The ordinary course of business, new value, and contemporaneous exchange for new value defenses are the most frequently used defenses in a preference action. However, there are additional, less common defenses that a...more
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
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
This presentation is prepared for in-house counsel and other attorneys practicing outside of the bankruptcy space and will address the following questions that often arise when dealing with a party that later goes into...more
Background - During a winding up, the statutory duty of a liquidator is to gather in the estate of the company, which includes recovering any amounts owing to the company. Creditors then submit proofs of debt and receive...more
The impact of the internet on brick-and-mortar retail, compounded by the economic devastation of the COVID-19 crisis, has created an unpredictable environment for trade vendors and service providers amid an uptick in...more
Anticipating a surge of bankruptcy filings resulting from COVID-19, it is important for businesses to understand the basic elements of a bankruptcy preference and the defenses available to defeat them. This article provides a...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
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
Wisconsin’s Chapter 128 has long been something of a “wild west” of insolvency proceedings. Modeled on the provisions of the federal Bankruptcy Act of 1898, the statute empowers a circuit court to appoint a receiver to...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
The Eleventh Circuit in Kaye v. Blue Bell Creameries, Inc. (In re BFW Liquidation, LLC) recently joined the majority of those Circuits Courts having ruled on the issue that subsequent new value does not need to remain unpaid...more
• In its recent decision in William S. Kaye, Trustee of the BFW Liquidating Trust v. Blue Bell Creameries, Inc. (In re BFW Liquidation, LLC), the U.S. Court of Appeals for the Eleventh Circuit held that liability for a...more
Trying to explain the primary purpose of Section 547 of the Bankruptcy Code to a client that just received a demand letter or complaint to avoid and recover preferential transfers can be a tough sell. Although the Section’s...more
Preference Claims: Elements: A preference is a transfer of property of a bankruptcy debtor that (1) was to or for the benefit of a creditor; (2) was on account of an antecedent debt; (3) was made while the debtor was...more
The Bankruptcy Code permits a bankruptcy trustee to compel return of a payment made to a creditor within 90 days before a bankruptcy petition. 11 U.S.C. § 547(b)(4)(A). The justification for compelling the return of...more
The 10th U.S. Circuit Court of Appeals issued an important preference decision on August 10, 2015. What You Need to Know - Payments to creditors arising from a recent, single business transaction can be protected by...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