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Clear Thinking Required When the Chips Are Down
One important attribute of any successful entrepreneur or business owner is knowing when to enter a new line of business or invest in equipment or employees to bolster an existing, growing service line. Another (perhaps even more important) attribute is knowing when to stop spending time, money and effort...
Thoughts From the BAP on How to (re)Define an “Executory Contract”
Making a quiet entrance into the public realm during the final week of last year, a new opinion from the United States Bankruptcy Appellate Panel of the Ninth Circuit (the “BAP”) suggests that it is time to revisit the definition of an “executory contract” as has been applied for years by...
When Contracts and Bankruptcy Collide, a Short Term May Be Better in the Long Term
As we learned during the downturn in 2008, the economic climate can change rapidly. When things are going well, many businesses forget the lessons of the past. No matter what industry your business is in, there may be occasions when you are asked to enter into a relatively long-term...
Beware of the ABL Trap: The Challenges of Retail Chapter 11 Debtors and Asset Based Lending
An asset-based loan (“ABL”) is often the financing of choice for retail borrowers – and for good reason. In its simplest form, an ABL is a credit facility, usually in the form of a revolving line of credit, the availability of which is based exclusively on the value of...
A Hypothetical Question Deserves a Hypothetical Answer: The Ninth Circuit’s Approach to Preference Transfers in In re Tenderloin Health
As a creditor, the news of a debtor who owes you a substantial sum of money filing bankruptcy is often the most alarming news you can learn—that is, until you seek advice of counsel and learn that payments the debtor made to you within 90-days prior to the bankruptcy...
What 2017 May Bring for the Restructuring Community
We asked some of our financial advisor colleagues to give us brief readouts on what they felt 2017 has in store for us now that we have gotten beyond the inauguration and into the first weeks of the Trump administration. Their thoughts follow: We have been seeing a lot...
The Ninth Circuit Loosens the Cap on Landlord Damages in In re Kupfer
Any property owner which has experienced the bankruptcy of a tenant is doubtless keenly aware of the limitation on damages which the Bankruptcy Code imposes on the landlord. A new decision by the Ninth Circuit bolsters the position of landlords in this long-running tussle. Section 502(b)(6) Cap Refresher Before...
December 1, 2016 Revisions to the FRBPs: Taking the Bite Out of the Core-Noncore Distinction
On December 1, 2016, something extraordinary happened. No, it was not president-elect Trump visiting another Carrier air conditioning factory in Indianapolis. It was an event that made no headlines and caused no stir. The Federal Rules of Bankruptcy Procedure were silently amended to remove all references to “core” and...
What Might a Trump Administration Mean for Bankruptcy Lawyers?
Inauguration is still about 2 months away, but it is not too early to begin thinking about what the Trump Administration will mean for commercial lawyers in general and bankruptcy lawyers in particular. Bankruptcy Reform? We are not hearing anything about a push for bankruptcy reform as part of...
November Surprise? Ninth Circuit Resurrects Post-Default Interest
The additional “default interest” owed when a borrower defaults under a loan agreement is a technical but highly critical part of any lending arrangement. This important “default interest” was the subject of a recent Ninth Circuit decision in which the Circuit made a nearly 180-degree u-turn away from its...
Producers Beware: What happens when your movie distributor files bankruptcy? Part 2.
In my blog article on August 9, I focused on some of the issues that licensors need to be aware of as they license IP rights, including the concept of allowing distributors to include “damages only” clauses in the distribution agreements. The second issue that often arises in distribution...
Producers Beware: What happens when your movie distributor files bankruptcy?
The Issue There has been written a plethora of articles about Bankruptcy Code §365(n) regarding the rights of parties to license agreements when the licensor files bankruptcy and rejects a license agreement. Generally, Code Section 365(n) allows the licensee to “accept” a rejection of a license agreement by the...
Litigation Funders Find Opportunity in Bankruptcy
Published in the Daily Journal on January 27, 2016 Greenberg Glusker partner Brian Davidoff, was quoted in a January 27, 2016, article by Daily Journal reporter Steve Creighton on the opportunities for litigation funding of adversary cases in bankruptcy. The article discusses the current bankruptcy climate, the looming increase of bankruptcies and how...
Greenberg Glusker Guides Imaging3, Inc. Through Multiple Bankruptcy Appeals
Published in the Los Angeles Business Journal on January 18, 2015 Imaging3, Inc., a Burbank-based medical technology developer, emerged from Chapter 11 bankruptcy in 2013 after the reorganization plan that would convert the company’s debt to equity was approved by the court. The company faced several setbacks when a...
New Year, New Fraudulent Transfer Law
It’s a new year, and we have a new law affecting debtors and creditors in California. Effective January 1, 2016, California’s Uniform Voidable Transactions Act (UVTA) has replaced California’s Uniform Fraudulent Transfer Act (UFTA). While the UVTA is similar to the UFTA in most respects, certain important changes and key...
Who Says There Are No More Big Los Angeles Chapter 11 Cases?
On July 30, 2015, Relativity Media, along with 144 of its affiliates, filed a Chapter 11 bankruptcy. The multi-million dollar entertainment company, which produced films such as The Social Network , The Fighter , Limitless , and others, is headquartered on Beverly Blvd. in Beverly Hills. As of the...
Golf Channel to Get a Mulligan?
In a surprise move, the Fifth Circuit vacated its recent, controversial Golf Channel opinion, potentially giving the Golf Channel a second chance in a case that seemed lost. As I discussed in my previous post, the Fifth Circuit recently held that the Golf Channel had to return over $5.9 million...
Experts: Drought Could Reverse Downturn in Bankruptcies
Greenberg Glusker Fields Claman & Machtinger LLP partner Brian Davidoff was quoted in an article that ran in the Los Angeles Daily Journal on July 31 st about current predictions that the bankruptcy industry will soon see a spike in bankruptcy cases as a result of the state’s ongoing...
50 Cent Files for Bankruptcy, Trades In Da Club for In Da Courthouse
The rapper Curtis James “50 Cent” Jackson III filed a voluntary chapter 11 bankruptcy petition in Connecticut bankruptcy court on Monday, July 13, 2015. Jackson rose to prominence with songs like In Da Club and P.I.M.P. from his 2003 album Get Rich or Die Trying (also the name of...
$5.9 Million in Payments to Golf Channel Declared Out of Bounds
The Fifth Circuit Court of Appeals recently issued a decision that should make defendants in Ponzi cases shiver in their boots. The court said that the defendant, the Golf Channel, had to return nearly $6 million and that it could not take advantage of a commonly-invoked “reasonably equivalent value&rdquo...
“Wellness” Has Made Us Better
On Thursday I published a blog article entitled Will “Wellness Make Us Better?, in which I posed the question of whether or not the U.S. Supreme Court would finally rule on whether or not bankruptcy courts can, in Stern type cases, enter a final judgment with the consent of the...
Will “Wellness” Make Us Better?
The United States Supreme Court will hand down its decision in the next few weeks in the case of Wellness Int’l Network, Ltd. v. Sharif (“Wellness”) , 727 F.3d 751 (7th Cir. 2013) regarding bankruptcy courts’ jurisdiction. The jurisdictional quagmire is a major and growing virus in the bankruptcy...
As Retail Bankruptcies Rise, Landlords Must Prepare
Commercial landlords should take notice. Within the last several months, one women’s clothing retailer after another has gone out of business. On Dec. 4, 2014, Philadelphia-based Deb Shops filed Chapter 11. Next came Delia’s , based in New York, which filed bankruptcy only four days later. On Jan. 9...
Retail Chapter 11 Filings Up, Bucking Bankruptcy Trends In Economic Recovery
The economy is humming along and bankruptcy filings are at historic lows. Nevertheless, a recent trend in retail may suggest that the times, they are a-changing. Radio Shack, the 95-year-old national chain that for many years was the “go-to” store for consumer electronics, has been in the headlines as a...
9th Circ. Panel Bolsters Trustees’ Reach-Back Powers
Editor’s note: this post originally appeared in Law360 . In a recent decision, the United States Bankruptcy Appellate Panel of the Ninth Circuit resolved what it described as an issue of “first impression” in the Ninth Circuit — whether or not the two-year statute of limitations provided by Section 546(a...
Local Bar Association Files Amicus Brief in Baker Botts v. ASARCO Case
Baker Botts L.L.P. et al. v. ASARCO L.L.C. , currently pending before the Supreme Court of the United States, is of particular interest to bankruptcy practitioners because this decision will have far-reaching effects regarding attorney’s fees in bankruptcy. Specifically, the Supreme Court will determine whether Section 330(a) of the...
Law Firm “Clawback” Suit Goes to Ninth Circuit
Bankruptcy Judge Dennis Montali in San Francisco said last week that he will allow a direct appeal to the Ninth Circuit from one of his rulings in the bankruptcy of Howrey LLP, skipping an intermediate appeal to the U.S. District Court. The judge relied on Jewel v. Boxer — a...
When Things Do Not Go As Planned In A Bankruptcy Sale
Editor’s note: this post originally appeared in Law360 . Buying distressed assets is big business. Many distressed assets are acquired through the seller’s Chapter 11 bankruptcy case. In those instances, a buyer will enter into a purchase and sale agreement with the seller/debtor and the agreement is generally subject to notice...
Escaping Taxes in Bankruptcy Through S Corporations
Editor’s note: this blog post was recently published in Law360. Shareholders of financially troubled S corporations may now be able to avoid the flow-through of taxes when the S corporation or its subsidiary files bankruptcy. In In re Majestic Star Casino, LLC , 716 F.3d 736 (3rd Cir. 2013), the Third...
Mind the Statutory Gap (aka A Jurisdictional Mess)
As we all know, on June 9 of this year, the Supreme Court issued its long-awaited decision in Executive Benefits Ins. Agency vs. Arkison , 134 S. Ct. 2165, 189 L. Ed. 2d 83 (2014), which we had hoped would resolve the open questions arising from Stern v. Marshall...