09/24/2014 - Weathering the Storm: Momentive Performance Court Rejects Market-Based Cramdown Interest Rate, Casts Doubt on Make-Whole Claims
On August 26, 2014, Judge Robert D. Drain of the Bankruptcy Court for the Southern District of New York issued a bench ruling in In re MPM Silicones, LLC
, Case No. 14-22503 (RDD), on several aspects of the plan of reorganization filed by debtor Momentive Performance Materials, Inc., a specialty chemicals manufacturing company, and its affiliated debtors.
01/23/2014 - Weathering the Storm: Fisker Delivers a "Buyer Beware" Warning to Lenders and Purchasers of Secured Claims Seeking to Credit Bid
On January 17, 2014 the Bankruptcy Court for the District of Delaware issued a ruling in Fisker Automotive Holdings, Inc., et. al.
, Case No. 13-13087 (KG), which highlights potential risks to both secured creditors and purchasers of claims in bankruptcy section 363 sales.
08/09/2013 - Private Equity Investment Funds can now have Pension Liability for the Obligations of Portfolio Companies
On July 24, 2013 the First Circuit Court of Appeals, applying an “investment plus” test, concluded that a Sun Capital private equity investment fund was engaged in a “trade or business” for purposes of determining whether the fund could be jointly and severally liable under ERISA for the unfunded pension withdrawal liability of the portfolio company.
01/24/2013 - Weathering the Storm: No Safe Harbor for You Because Distributing the Proceeds of a Sale of Securities Isn't "In Connection With" a Securities Contract According to Grede v. FCStone
On January 4, 2013, the United States District Court for the Northern District of Illinois, Eastern Division (the “District Court”) issued a Memorandum Opinion and Order that seems demonstrably at odds with the majority of cases analyzing the § 546(e) safe harbor provision.
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...
08/14/2012 - Weathering the Storm: They Said What They Meant: 5th Circuit Declines Invitation to Add Requirements to Safe Harbor for Forward Contracts
The Bankruptcy Code provides a number of “safe harbors” for forward contracts and other derivatives. These provisions exempt derivatives from a number of Bankruptcy Code provisions, including portions of the automatic stay, restrictions on terminating executory contracts, and the method for calculating rejection damages.
07/25/2012 - An Update on the Manifestly Contrary to Public Policy Exception
Chapter 15 is based on the Model Law on Cross Border Insolvency (the “Model Law”), which had been prepared by the United Nations Commission on International Trade Law (“UNCITRAL”), with significant input from insolvency practitioners all over the world.
07/17/2012 - Weathering the Storm: Sunbeam Sheds New Light On The Rights Of Trademark Licensees
On July 9, 2012, the Seventh Circuit decided in Sunbeam
that the rejection of a trademark license by a bankrupt trademark licensor does not
deprive the trademark licensee of its right to continue to use the trademark, and disagreed with the 1985 Fourth Circuit decision in Lubrizol
that held to the contrary.
06/20/2012 - Weathering the Storm: Vitro’s Concurso Plan is Manifestly Contrary to Public Policy . . . at Least for Now
On June 13, 2012, the United States Bankruptcy Court for the Northern District of Texas (the “Bankruptcy Court”) published an opinion ruling on whether 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 be enforced under Chapter 15 of United States Bankruptcy Code.
01/09/2012 - Qimonda's Impact on Patent Licenses When a Licensor Goes Bankrupt in a Foreign Land
Can a U.S. patent licensee whose license has been rejected by a licensor under foreign law in a foreign bankruptcy rely on the protections of § 365(n) of the U.S. Bankruptcy Code? On October 28, 2011, the United States Bankruptcy Court for the Eastern District of Virginia issued an opinion addressing this in the Chapter 15 case of Qimonda AG (“Qimonda”).
01/09/2012 - The IP Beacon, January 2012
A Haynes and Boone Newsletter highlighting current issues in Intellectual Property Law.
11/08/2011 - Weathering the Storm: Qimonda, Patent Licenses and § 365(n)
On October 28, 2011, the United States Bankruptcy Court for the Eastern District of Virginia issued an opinion in the Chapter 15 case of Qimonda AG (“Qimonda”). The bankruptcy court held that the application of § 365(n) to executory licenses to U.S. patents was required to sufficiently protect the interests of U.S. patent licensees under Chapter 15 of the Bankruptcy Code and that the failure of German insolvency law to protect patent licensees was “manifestly contrary” to United States public policy.
09/27/2011 - Pratt's Journal of Bankruptcy Law: A Routine Foreclosure May Be A Preferential Transfer
A bankruptcy judge in Dallas recently issued an opinion that exposes foreclosing lenders who credit bid to possible attack. The court ruled that a lender that credit bid to purchase its collateral at a foreclosure sale prior to the bankruptcy of the borrower could be sued for a preference to recover the purchased property, even though the debtor could not bring a fraudulent transfer suit regarding the foreclosure sale. The authors of this article discuss the case and its ramifications.
08/25/2011 - Law360 Guest Column: Case Study - In Re Village At Camp Bowie
Law360, New York (August 25, 2011) -- Bankruptcy Judge Michael Lynn of the Northern District of Texas recently issued a noteworthy opinion in In re Village at Camp Bowie I LP that addresses two important Chapter 11 confirmation issues.
08/09/2011 - Weathering the Storm: A Routine Foreclosure May Be A Preferential Transfer
As many creditors have unfortunately discovered, the Bankruptcy Code allows a debtor to sue the creditor for certain payments – called preferences – that the creditor received from the debtor prior to the bankruptcy. The creditor is deemed “preferred” over other creditors if the transfer resulted in a payment on the creditor’s claim against the debtor that was larger than the payment the creditor would have received if the transfer had not been made and the creditor had instead participated in distributions from the debtor’s bankruptcy estate.
07/25/2011 - Weathering the Storm: Second Circuit Affirms an Expansive Interpretation of Section 546(e) of the Bankruptcy Code
On June 28, 2011, in In re Enron Creditors Recovery Corp. v. Alfa,
the Second Circuit Court of Appeals held that Enron’s redemption of its commercial paper prior to maturity fell within the definition of a “settlement payment” and was protected from avoidance under § 546(e)’s safe harbor provision in Title 11 of the United States Code.
07/05/2011 - The Supreme Court Holds Unconstitutional a Key Provision of the Bankruptcy Code
On June 23, 2011, the Supreme Court handed down a 5-4 decision in the Stern v. Marshall
holding that a bankruptcy court’s exercise of statutory jurisdiction was unconstitutional when it adjudicated a counterclaim relating to a purely state law cause of action.
04/11/2011 - Weathering the Storm: District Court Imposes Additional Duties on Creditors Seeking to Reclaim Goods Sold to a Debtor During the 45-Day Period Preceding the Bankruptcy Case
Vendors who sell goods to customers are probably familiar with the issues that arise when the customer later files bankruptcy. For instance, Section 546(c) of the Bankruptcy Code (and applicable state law) provides a vendor the right to reclaim goods it sold to the customer within 45 days of the bankruptcy petition date.
02/14/2011 - Weathering the Storm: Ability to Gift New Equity to Old Equity through Plan Disapproved in the Second Circuit and Ulterior Motives in Purchasing Debt Could Lead to Designation of Vote
On February 8, 2011, the Second Circuit Court of Appeals issued an opinion that will have a major impact on Chapter 11 plan confirmation.
10/01/2010 - The use of DIP financing as a mechanism to control the US corporate restructuring process
Lenders routinely use debtor-in-possession financing (‘DIP financing’) agreements to gain substantial control over debtors in Chapter 11 and the bankruptcy reorganisation process. However, the currently accepted degree of lender control over the Chapter 11 process has evolved into a major de facto change in the bankruptcy process that inhibits rehabilitation of distressed companies.
05/03/2010 - Rule 2019 - It’s as Plain as the Nose on an Elephant's Face
Federal Rule of Bankruptcy Procedure 2019 requires every committee in a chapter 9 or chapter 11 bankruptcy case “representing” more than one creditor or equity security holder to file a verified statement containing certain disclosures, such as the amount of claims held by members of the committee, the dates the members acquired their claims and the amounts paid for the claims.
04/07/2010 - Weathering the Storm: Does the Bankruptcy Code Restrict a Liquidation Trustee’s Power after Plan Confirmation?
Reversing the decision of the United States District Court for the Northern District of Illinois, the Seventh Circuit (the “Court”) held in Grede v. Bank of New York Mellon, et al.,
No. 09-3121 (7th Cir. Mar. 18, 2010) that neither the Bankruptcy Code (the “Code”) nor the Supreme Court’s decision in Caplin v. Marine Midland Grace Trust Co.,
406 U.S. 416 (1972) apply to the activities of a post-confirmation liquidating trustee appointed in a liquidating trust created by a confirmed plan of reorganization.
03/31/2010 - Weathering the Storm: The Mervyn's Holdings Decision: A Lesson for Sellers and Equity Firms Participating in Leveraged Buyouts
The recent case of Mervyn’s LLC v. Lubert-Adler Group IV, LLC, et al.
(In re Mervyn’s Holdings, LLC), serves as a warning to sellers and equity firms participating in leveraged buyouts to be wary of the effect such buyouts will have on creditors of the target company.
03/25/2010 - Weathering the Storm: Third Circuit Ruling on Credit Bidding is Bad News for Lenders
On March 22, 2010, the Third Circuit released its long-awaited ruling in the Philadelphia Newspapers case regarding the applicability of credit bidding. In Philadelphia Newspapers, the proposed plan of reorganization provided for a sale of assets free of the liens of the secured creditors without allowing the secured creditors to credit bid on the assets.
03/19/2010 - Fall Down - Go Boom! Lessons from the Mega Cases 2008-2010
Presented at the 2010 Southeastern Bankruptcy Law Institute Seminar, March 19, 2010.
03/18/2010 - Trashing the Promenade, The Company Town, The Dead Debtor and Many Other Recent Anomalies and Contradictions From Bankruptcyland
Presented at the 2010 Southeastern Bankruptcy Law Institute Seminar, March 18, 2010.
03/11/2010 - Weathering the Storm: Single Asset Real Estate Cases
From 2010 until 2013, approximately $1.4 trillion of commercial real estate loans will mature. This alert discusses the rules governing Single Asset Real Estate (SARE) Chapter 11 cases.
10/21/2009 - Weathering the Storm: Savings Clauses: Fraudulent Transfer Issues in the TOUSA Bankruptcy Case
The judge's ruling in the October 13, 2009 TOUSA, Inc. bankruptcy cases raises a number of troubling issues for commercial lenders, including but not limited to, the judge calling into question the enforceability of fraudulent conveyance “savings clauses,” common in commercial loan agreements.
06/12/2009 - Weathering the Storm: Look Out Lenders—Collecting Fees For Loaning Money May Be Considered Evil
In a recent case, a Bankruptcy Court in Montana equitably subordinated a pre-bankruptcy secured lender’s first lien claims to the claims of the DIP lender and the unsecured creditors even though the lender did not owe any fiduciary duties to the debtor or any of the debtor’s potential creditors.
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.
04/23/2009 - Weathering the Storm: Recent Decision Affects Setoff Under Netting Agreements
Companies that engage in multiple transactions with different entities of related groups often enter into contractual netting agreements that allow the setoff of obligations between entities within the groups. The effectiveness of these agreements has been called into question by a recent decision of a bankruptcy court in Delaware, which refused to allow a party to a contractual netting agreement to offset its obligations to the debtors against obligations of the debtors under the netting agreement. Parties to such netting agreements may have to reconsider how to structure such agreements and how to defend their effectiveness in court.
04/08/2009 - The Other End of the Firehose: The Treasury Giveth and the IRS Taketh Away
Presented as part of "Tax Issues in Large Case Chapter 11 Bankruptcies," ABA, April 8, 2009.
03/18/2009 - Reality Warp - In Bankruptcy, Anything Goes
This article outlines a few interesting recent cases that impact Chapter 11 reorganizations and show how the intersection of computer research, common law, creative financing and the proliferation of judicial decisions has warped legal reasoning to the point where anything can happen.
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.
12/17/2008 - FAQ for Car Dealerships: What if the Big 3 Go Into Bankruptcy
The three major automobile manufacturers in the United States, General Motors, Ford and Chrysler, have indicated that without significant financial assistance from the government a filing for organization under Chapter 11 of the United States Bankruptcy Code is likely. Such a filing would have a significant impact on car dealers. This document answers the questions dealerships nationwide would have to confront.
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
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.
05/02/2004 - You Can Plan On It: An Overview of Priorities, Disclosure Statements, Plan Provisions, and Cram-Down
Private Equity and Mezzanine Debt Financing, Dallas, Texas, May 2, 2003, Houston, Texas, May 9, 2003
04/15/2004 - Joe Isuzu on the Witness Stand and How to Examine Him (Her) (It)
American Bankruptcy Institute 22nd Annual Spring Meeting, Washington, D.C., April 15-18, 2004
09/29/2003 - Overview of Restructuring and Bankruptcy for Airlines
The Legal and Business Guide to Airline Restructuring, New York, September 29-30, 2003
09/18/2003 - Cramdown: Everything You Wanted to Know and More About Rate and Term
American Bankruptcy Institute 11th Annual Southwest Bankruptcy Conference, Las Vegas, September 18-21, 2003
08/05/2003 - Ocean-Front Property in Montana and Other Shrewd Purchases
Sales of Assets in Bankruptcy Pursuant to Section 363
06/23/2003 - Conforming to the Bankruptcy Code: What Lenders and Investors Need to Know
The Legal and Strategic Guide to Chapter 11 Finance, New York, June 23-24, 2003
03/20/2003 - Straw, Gold, Extortion, Bureaucrats, Conspiracy, Furriners and Other Methods of Finding Assets
Southeastern Bankruptcy Law Institute, Atlanta, Georgia, March 20-22, 2003
01/01/2003 - Corporate Governance Issues for the Financially Troubled Company
01/01/2003 - Schools, Fools and Tax Collector Tools
New Stuff and New Uses For Old Stuff When the Tax Reaper Swings His Scythe (2003 Texas CPA Tax Institute)
12/05/2002 - Limits (and Expansions After Craft) of the Scope of Bankruptcy Court Power
14th Annual Winter Leadership Conference, Tuscon, Arizona, December 5-7, 2002
06/13/2002 - Getting the Deal Done with a Distressed Company - Current Legal/Bankruptcy Issues
Mergers and Acquisitions 2002: Effective Dealmaking in the Post-Boom Economy: Legal and Investment Banking Perspectives, Dallas, Texas, June 13, 2002
06/10/2002 - Cross-Border Insolvency With Mexico
III Second Annual International Insolvency Conference, Fordham University Law School, June 10-11, 2002
06/05/2002 - I Just Called...To Say... I'm Bankrupt: Telecommunication and IP Issues in Bankruptcy
Dallas Bar Association Bankruptcy Section
04/26/2002 - Justification, Indemnification, Obfuscation and Procrastination: Tales of Sales and Chapter 11 Gales
15th Annual Northwest Bankruptcy Institute, Portland, Oregon, April 26-27, 2002
12/11/2001 - Squeezing Blood From Turnips: Tax Issues in Bankruptcy Matters
Texas Society of Certified Public Accounts - 2001 CPE Exposition Conference
06/28/2001 - Liar, Liar, Pants of Fire - The Use of Expert Witnesses in Bankruptcy Litigation
American Bankruptcy Institute Hawaiian Bankruptcy Workshop in Maui, Hawaii
06/11/2001 - Towards an Effective Indonesian Bankruptcy Law, Part 4
New York - International Insolvency Institute
06/11/2001 - Report of the Indonesian Private Business Initiative Regarding the Indonesian Insolvency Law
New York - International Insolvency Institute
05/30/2001 - Licensed to Kill: A Tale of Contract Termination with Extreme Prejudice, Lapses in Security and...
University of Texas School of Law - 14th Annual Computer Law Conference
If Their Business Judgment Was So Good How Come They're In Bankruptcy and Other Perplexing Mysteries
American Bankruptcy Institute Annual Spring Meeting
03/22/2001 - Recent Developments in Commercial and Consumer Cases
Southeastern Bankruptcy Law Institute
02/01/2001 - Silicon Secrets
02/01/2001 - Literal Licensees, Disappearing Collateral And Other Techie Tricks
as presented to INSOL World