Category: Chapter 11
What’s Insolvency Got to Do With it Anyway? Assessing “Bad Faith” Bankruptcy Filings Following In Re Aearo
Bankruptcy courts possess broad discretion to dismiss chapter 11 bankruptcy cases for “cause” under Section 1112(b) of the Bankruptcy Code. While the Bankruptcy Code enumerates a long (though non-exhaustive) list of instances when a case may clearly be dismissed for cause, courts generally agree that cases may also be...
The Effective Use of Section 363 Sales
When a company is not likely to survive a restructuring, its assets may have value to a third-party buyer. Absent legal protection, a buyer of a financially distressed business will usually be concerned that the company’s creditors could pursue the acquired business on various legal theories, including “successor liability,&rdquo...
Crypto Contagion
Cryptocurrency had a market cap of $10 million in early 2011; it rocketed to nearly $3 trillion in February 2022 and is now down to about $1.1 trillion today. Some of this year's more notable gyrations in crypto's fall from grace include the following: In May there was a decline of...
Bankruptcy & Restructuring Roundtable Highlights
Bankruptcy – and the restructuring process – are challenging and complex endeavors, requiring a variety of tactics and resolution mechanisms. For the parties involved, financial expectations can be at odds with the reality of the situation, and knowing when to compromise and how best to proceed for your organization’s...
A Decline In Chapter 11 Filings Allows Attorneys to Utilize Their Skills Elsewhere
Due to its relation to the state of the economy, a bankruptcy lawyer’s practice can be highly cyclical – actually, counter-cyclical. In the last 30 years or so we have seen a number of economic downturns – the bankruptcy boom of the late ‘80’s/early ‘90’s; the dot-com bubble of the...
Bankruptcy & Restructuring - A Roundtable Discussion
Due in large part to the challenges brought on by the pandemic, Chapter 11 bankruptcy filings last year hit the highest level since 2010—a trend expected to continue throughout this year. Bankruptcy and restructuring is complex, full of twists and turns. Yet for all the expense, blame, negotiation, compromise...
License Rights and Bankruptcy: No “Silver Linings”
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 Spyglass , Bruce Cohen, the producer of the acclaimed film...
To Ship or Not to Ship: 3 FAQ’s for Creditors Seeking Guidance Before or During a Retail Bankruptcy
COVID-19 has impacted an already shaky retail industry and pushed some of its participants into a rapid-fire series of bankruptcy filings. Although there was already a long list of prominent retail bankruptcies over the past several years prior to “shelter at home” orders – e.g. Toys “R” Us, Gymboree, Payless (twice), Forever 21, Barneys, Brookstone, Sears, Pier 1 (the list goes on) – it is unlikely that we have...
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...
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...
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...
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...
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...
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...
Report from the BHBA’s Review of the Three Bankruptcy-Related Supreme Court Decisions
The Beverly Hills Bar Association’s Bankruptcy Section recently held a program discussing the three recent bankruptcy-related Supreme Court decisions: Law v. Siege l , Executive Benefits Insurance Agency v. Arkison (In re Bellingham) (redux of Stern v. Marshall ), and Clark v. Rameker (regarding inherited IRAs and exemptions). The program was...
A New Year Brings New Challenges
A new year always brings new and unexpected challenges. Turnaround professionals make careers out of expecting the unexpected and helping their clients turn challenges into opportunities. We asked several turnaround professionals to let us know, in a few words, what they see coming in 2014, and here are their...
What’s Up for Restructuring Professionals in 2014?
Filings are Down Commercial bankruptcy filings were down by 28% in 2013 over the prior period in 2012, and overall bankruptcy filings dropped 15%, putting the country on the lowest level of petitions since 2007 according to figures released by the American Bankruptcy Institute. The data, compiled by Epiq Systems...
The Girls Gone Wild Chronicles — Episode 1
Joe Francis built his Girls Gone Wild (GGW) empire (and the ego of an emperor) filming intoxicated college girls in various states of undress, putting that footage on VHS (and later DVDs and branded websites), and selling them to eager consumers across the globe. If you were alive and...
To Stalk Or Not To Stalk? — That is the Question in a 363 Sale
The biggest trend in Chapter 11 bankruptcies over the past 10 years is to sell assets through a “Section 363 sale,” named for Section 363 of the Bankruptcy Code, which describes the standards for sales in bankruptcy court. Previously, in most Chapter 11 cases, the debtor would propose a...
