Disagreement regarding the interpretation of section 365(c) of the Bankruptcy Code has led to divergent rulings among the bankruptcy and federal circuit courts regarding whether a bankruptcy trustee or chapter 11 debtor can...more
Financial distress persists in the commercial real estate market, raising the prospects that property owners and landlords could seek relief under chapter 11 of the Bankruptcy Code. The Bankruptcy Code contains numerous...more
When a tenant under an unexpired lease of nonresidential real property files a case under chapter 11 of the Bankruptcy Code, both tenant and landlord acquire rights and obligations that may contravene the terms of the lease...more
What Happened? One fundamental question in any restructuring relates to the treatment of funded debt obligations, like mortgages. When the cost of prepetition debt is higher than the prevailing market rates, a debtor may...more
Three years have passed since the COVID-19 pandemic reached the United States and its effects are still being felt today. Even though lockdown measures have largely disappeared and many workers have returned to the office,...more
In the wake of several high-profile collapses of cryptocurrency exchanges, most notably FTX, Celsius, and Voyager, the state of the digital asset landscape is ever-changing, with more questions and landmines than clear paths...more
This alert highlights a recent decision by Judge Michael E. Wiles in the Bankruptcy Court for the Southern District of New York (“SDNY”), which held that lease rejection damages should be calculated using the “time approach”...more
The ability of a bankruptcy trustee or chapter 11 debtor-in-possession ("DIP") to assume, assume and assign, or reject executory contracts and unexpired leases is an important tool designed to promote a "fresh start" for...more
The U.S. Supreme Court recently heard arguments in MOAC Mall Holdings LLC v. Transform Holdco LLC. The case involves the authority of a court of appeals to review a bankruptcy order authorizing a bankrupt tenant to sell its...more
The recent decision of the Ninth Circuit in In re Hawkeye Entertainment, LLC contains a few important takeaways with respect to the treatment of executory contracts and unexpired leases under section 365 of the Bankruptcy...more
The intersection between Medicare and state Medicaid regulatory schemes on the one hand and bankruptcy proceedings on the other continues to be an interesting, often highly contested, source of bankruptcy litigation. In...more
Summary - A recent decision from the Ninth Circuit Court of Appeals illustrates the challenges faced by both bankrupt tenants and their landlords in the assumption of leases by tenants in bankruptcy proceedings. In the...more
To encourage parties to transact with debtors in bankruptcy, the Bankruptcy Code in corporate bankruptcies provides highest priority to “administrative expenses,” which include “the actual, necessary costs and expenses of...more
Section 365 of the Bankruptcy Code allows debtors to “assume” unexpired leases, recommitting themselves and their counterparties to the existing lease terms, subject to approval by the Bankruptcy Court. If there are existing...more
This entry is part of Nelson Mullins’s ongoing “Bankruptcy Basics” blog series that is intended to address foundational aspects of bankruptcy for non-bankruptcy practitioners and professionals. This entry will discuss how...more
As intellectual property becomes a more important part of commerce, the question of how IP licenses are treated in bankruptcy is of more interest to companies negotiating such licenses. When a Chapter 11 bankruptcy is...more
Nine Point Energy Holdings, Inc. and its affiliates (collectively, "Nine Point" or "Nine Point debtors") constituted an oil and gas production and exploration company that sought to reorganize in chapter 11 through a going...more
While the pandemic has had varying effects on different industries, certain segments of the commercial real estate market have endured, and may yet endure, greater pain than other industries. ...more
In Highland Capital Mgmt. v. Dondero (In re Highland Capital Mgmt.), Case No. 21-03007-sgj (Bankr. N.D. Tex. 2021), the U.S. Bankruptcy Court for the Northern District of Texas held that a debtor could not be compelled to...more
Debtors and trustees are faced with the task of maximizing the value of bankruptcy estate assets in the face of many obstacles, such as limited liquidity runway and the competing interests of various creditor and equity...more
Whether a contract is "executory" such that it can be assumed, rejected, or assigned in bankruptcy is a question infrequently addressed by the circuit courts of appeals. The U.S. Court of Appeals for the Third Circuit...more
The Third Circuit’s decision in Spyglass Media Company v. Cohen has added to what is already a tangled web of cases dealing with the rights of licensees and licensors when one of them becomes a debtor in bankruptcy. In...more
Section 365(h) of the Bankruptcy Code provides special protection for tenants if a trustee or chapter 11 debtor-in-possession ("DIP") rejects an unexpired lease under which the debtor was the lessor by giving the tenant the...more
The $2.3 trillion Consolidated Appropriations Act of 2021 brought relief to many people and businesses struggling due to the COVID-19 pandemic when the act became effective on December 27, 2020. The relief provided under the...more