11/28/2012 -
Weathering the Storm: Vitro’s Concurso Plan Is Theoretically Enforceable in the United States . . . But Not This Time . . . Under These Circumstances
On November 28, 2012, the United States Court of Appeals for the Fifth Circuit published an opinion affirming the bankruptcy court’s ruling that the Mexican Plan of Reorganization (the “Concurso Plan”) of the Mexican glass-manufacturing company, Vitro, S.A.B. de C.V., approved by the Federal District Court in Mexico, should not be enforced under Chapter 15 of United States Bankruptcy Code The United States Bankruptcy Court for the Northern District of Texas (the “Bankruptcy Court”) concluded that...
11/08/2012 -
Lifting the Veil and Finding the Pot of Gold: Piercing the Corporate Veil and Substantive Consolidation in the United States
By the time a company becomes insolvent or files insolvency proceedings, creditors are often frustrated by the lack of asset value remaining in the entity with which they did business. In certain circumstances, legal theories exist that enable creditors to look behind the contracting parties in order to impose personal liability on directors or pursue assets in related entities. This article addresses some of these theories in the United States.
07/25/2012 -
Sauce for the Goose? Dual Standard Emerging in Cross Border Insolvencies: Domicile not Enough to Recognize Foreign Proceeding
Recent cases interpreting Chapter 15 of the United States Bankruptcy Code (11 U.S.C. § 101, et seq., as amended) (the “Bankruptcy Code”) suggest that there are different standards for recognizing whether domestic entities and foreign entities have filed insolvency proceedings in the proper venue.
07/25/2012 -
Chapter 15 of the U.S. Bankruptcy Code: Overview of Procedures for Cross Border Insolvencies
The Bankruptcy Abuse, Prevention and Consumer Protection Act of 2005, which was signed into law in the United States on April 20, 2005 and became effective, for the most part, on October 17, 2005, creates a new chapter of the United States Bankruptcy Code (11 U.S.C. 101, et seq., as amended) (the “Bankruptcy Code”) – Chapter 15.
05/10/2011 -
Increased Capital, Competition Bolsters DIP Financing Market
A flood of new capital and lenders are rolling into the market for debtor-in-possession financing this year as investors seek reliable and safe returns, despite an easing in the pace of Chapter 11 filings, according to bankruptcy attorneys and investment bankers.
12/11/2009 -
Weathering the Storm: Charter Communications Decision Allows Reinstatement of Debt
Many companies secured their financing several years ago when the credit market featured advantageous pricing and loose loan covenants. Because these favorable terms would be impossible for borrowers to obtain in today’s lending environment, many viable companies with highly leveraged capital structures are looking for strategies to restructure debt. Charter Communications (“Charter”), the country’s fourth largest cable television company, took a gamble during, arguably, the most challenging period in the modern era of global corporate finance. See how the company's bold moves paid off.
10/04/2009 -
And the Walls Came Tumbling Down: Issues in U.S. Construction Insolvencies
We are in the midst of arguably the worst economic crisis since the Great Depression. One of the biggest victims of this meltdown is the construction industry, both residential and commercial, which has been hit as hard, if not harder, than any industry in the United States.
08/01/2009 -
Fiduciary Duties in Troubled Times
The recent economic tumult brings to the forefront the issue of fiduciary duties in the context of insolvency – an unfortunate circumstance faced by an increasing number of boards of directors and shareholders in these troubled times.
07/20/2009 -
Weathering the Storm: Fiduciary Duties of Officers and Directors in Troubled Company Situations
Directors and officers managing corporations, especially when the corporation is insolvent or operating in insolvency situations, need to be cognizant of their fiduciary duties. This alert provides a brief overview of these fiduciary duties, including practical considerations in the exercise of these duties.
07/01/2009 -
Weathering the Storm: The Appointment of an Examiner
With the economic crisis leading to the failure of many businesses, bankruptcy cases are on the rise. In many of the cases grabbing headlines, such as Lehman Brothers, Nellson Nutraceutical, New Century and SemCrude, courts have shown a willingness to appoint examiners to investigate, report on and make recommendations regarding possible issues of mismanagement, fraud or other improprieties relating to the affairs of the debtor or its former or current management.
04/30/2009 -
Weathering the Storm: Recent Decision Creates Additional Cash Requirements to Reorganize
On April 8, 2009, the Second Circuit Court of Appeals issued a ruling that creates an additional hurdle for companies providing single-employer pension funds when seeking to reorganize through a bankruptcy. In general, the termination of a pension plan can give rise to a per-employee termination premium (a “Termination Premium”) owed by the company terminating the plan to the Pension Benefit Guaranty Corporation (“PBGC”), the quasi-governmental entity that insures pension plans.
03/05/2009 -
Chapter 15 of the U.S. Bankruptcy Code: New Procedures for Cross Border Insolvencies
The Bankruptcy Abuse, Prevention and Consumer Protection Act of 2005, which was signed into law in the United States on April 20, 2005 and became effective, for the most part, on October 17, 2005, creates a new chapter of the United States Bankruptcy Code (11 U.S.C. 101, et seq., as amended) (the “Bankruptcy Code”) – Chapter 15.
08/30/2007 -
Enron--Appellate Court Overturns Ruling on Equitable Subordination and Claims Disallowance
‘Taint Clear: “Purchased” Claims are Not Subject to Equitable Subordination or Disallowance Based Solely on Seller’s Conduct, but Purchaser’s Knowledge of the Seller’s Conduct May Be Fatal
05/13/2007 -
Let's Do Lunch: The Changing Dynamics of Bank Groups in Insolvency Proceedings and Workouts
Suppose you wanted to borrow a billion dollars. Where would you go? Who would you see? Who has a billion dollars they would be willing to lend to you? Even if you knew someone with a billion dollars, would they lend it all to you and no one else?
04/12/2007 -
Supreme Court Holding Allows Bankruptcy Proofs of Claim to be Amended to Recover Attorneys' Fees
On March 20, 2007, the United States Supreme Court issued a unanimous opinion in Travelers Casualty & Surety Co. of America v. Pacific Gas & Electric Co., No. 05-1429, 2007 WL 816795 (March 20, 2007), holding that a creditor may supplement its unsecured claim in a bankruptcy case to recover contract-based attorneys’ fees incurred during the bankruptcy case through the litigation of bankruptcy law matters.