Companies seeking to confirm a Chapter 11 bankruptcy plan typically include releases that discharge the bankrupt company (the debtor) from liability on claims, thereby giving the debtor a chance to emerge from bankruptcy and seek a profitable future. However, Chapter 11 plans may also seek to discharge debts owed not by the debtor, but by […]
Beware of Third-Party Releases in Bankruptcy
Litigating the Ordinary Course of Business Defense – Summary Judgment and the Stanziale v. Industrial Specialists Decision
A. Fees & Costs Preference litigation is frequently a game of poker between a bankruptcy trustee and creditors in which the trustee begins with a significant advantage – the lawsuit. In most cases, simply filing a lawsuit ensures that the bankruptcy trustee will leverage at least a nuisance settlement out of the defendant creditor. […]
Licensing Under the Perishable Agricultural Commodities Act: Is a USDA Apology Enough to Rescue a PACA Licensee?
The United States District Court for the Southern District of Ohio was recently presented with a strange set of facts regarding a purported licensee under the Perishable Agricultural Commodities Act (PACA). The issue was whether an acknowledged mistake by the United States Department of Agriculture (USDA) – accompanied by a written USDA apology, no less […]
Structured Dismissals Part IV – Bells & Whistles: Sweetening the Pot and Drawing Objections
A. Where We Left Off As noted in Part III, movants seeking approval of structured dismissal motions typically must prove that the proposed dismissal is in the best interest of the creditors. To do so, movants will usually have to prove that the dismissal provides better treatment than would a liquidation. To that end, most […]
Alternatives to a Bankruptcy Filing
Debtors and creditors alike should understand that no debt restructuring option is perfect and that different options have advantages and disadvantages. To learn more, click on the link below to an article recently published by the online news site Hotel News Now: http://www.hotelnewsnow.com/Article/16344
Working for Free: Supreme Court Holds that Fees Incurred Defending Fee Application are not Recoverable
The Bankruptcy Code allows bankruptcy trustees, debtors in possession, and official committees to hire attorneys, accountants, and other professionals to assist them in carrying out their statutory duties, with their fees to be paid by the bankruptcy estate. However, to get paid, these professionals must obtain approval from the bankruptcy court. But what happens when […]
Providing Notice Under the Perishable Agricultural Commodities Act: Get it Exactly Right, or Risk Not Getting Paid
A recent decision by the District Court for the Eastern District of North Carolina demonstrates just how important it is for parties asserting rights under the Perishable Agricultural Commodities Act (PACA) to provide proper notice. Failing to correctly provide notice means that the creditor is not entitled to the PACA trust fund protections. In most […]
Setoffs – Cutting Your Losses Both Inside and Outside Bankruptcy
Read Director Joseph Coleman’s article in CRF New on setoffs. Setoffs- Cutting Your Losses Both Inside And Outside Bankruptcy
Springtime is Stern Time
On May 26, 2015, continuing a springtime ritual for bankruptcy lawyers, the Supreme Court issued its latest “progeny of Stern” ruling on the adjudicative authority of the bankruptcy courts. In a 6-3 decision the Court held that “Our precedents make clear that litigants may validly consent to adjudication by the bankruptcy courts.” Wellness Int’l Network, […]
Fifth Circuit has Second Thoughts on Pro-Snax Fees Decision
How would you like to be paid only for work which, in hindsight, unquestionably resulted in a material benefit to your employer? That unsuccessful sales call? Freebie. That account you spent hours trying to collect, but ultimately had to write off? That’s on your time. Thanks. Well, bankruptcy lawyers wouldn’t like that compensation arrangement any […]