Creditors Catch a Break on Preference Actions and the New Value Defense – Re: Claims for 20-Day Shipments
When a debtor receives a shipment of goods within 20 days before the date it files bankruptcy and has failed to pay for said shipment prior to the bankruptcy filing, the creditor is entitled to an administrative claim, which is the highest priority in terms of unsecured claims. Further, [...]
Creditors’ Rights Against Officers and Directors
Bill Siegel was invited to write an article for the Bankruptcy spotlight in the May 2023 edition of the Dallas Bar Association's Headnotes publication. We are sharing the article here, with permission from the DBA. Directors of corporations or managers of limited liability companies (“LLC”) owe a fiduciary [...]
The Texas Two-Step is Alive and Well…But a Judge Dismissed the J&J Bankruptcy Absent Financial Distress
Bankruptcy attorney Bill Siegel reviews the Third Circuit's take on the Johnson & Johnson litigation and the "Texas Two-Step."
Are Lessees Entitled to Protection Upon a Bankruptcy Court-Approved Sale of Property Free and Clear? Yes, Under Certain Circumstances
In In re Royal St. Bistro, LLC, 26 F.4th 326 (5th Cir. 2022), the U.S. Court of Appeals for the Fifth Circuit recognized the rights of lessees when the debtor sells an asset free and clear of all liens, claims and encumbrances. The focus is not necessarily under bankruptcy [...]
Nondischargeable Debt: Corporate Officer Cannot Hide Behind Corporate Shield on Claim Based on Fraud
[Regarding: Glencove Holdings, LLC v Bloom (In re Bloom), No. 22-1005 (10th Cir. July 12, 2022)] The Tenth Circuit Court of Appeals recently affirmed the bankruptcy court and bankruptcy appellate panel rulings that a debtor owner and officer of a company may have a nondischargeable debt for a fraud [...]
Lenders Beware: Lender Liability is Back
Lender liability lawsuits have generally been few and far between. However, recently, a Chapter 7 trustee obtained a judgment against a lender premised on the lender’s bad acts against the debtor prior to the filing of a bankruptcy Chapter 11 reorganization, which was subsequently converted to a Chapter 7 [...]
District Court Criticizes Bankruptcy Judge for Approving Far-Reaching Third-Party Releases and Addresses Venue Shopping
A U.S. District Court judge in the Eastern District of Virginia1, Richmond Division, set aside confirmation of a Chapter 11 plan that contained “extremely broad third-party (non-debtor) releases.” What makes this case so exceptional is the analysis, and also how critical this judge was of the bankruptcy judge who [...]
Bankruptcy Auctions and the Establishment of Fair Market Value
There is a reason why a buyer of substantially all of a seller’s assets may want to pursue a sale via the buyer filing bankruptcy, through a bankruptcy auction. By obtaining a court order approving a sale via a bankruptcy auction, a finding of fair market value can be [...]
Enforcement of Arbitration Clauses – Related to Bankruptcy
Discussion of: Highland Capital Management LP v. Dondero (In re Highland Capital Management LP), 21-03003, 2021 Bankr. LEXIS 3314 (Bankr. N.D. Tex. Dec. 3, 2021) Bankruptcy courts are in disagreement whether to enforce arbitration provisions as opposed to trying the matter in the bankruptcy court. Recently, the Bankruptcy Court for [...]
Creditors Precluded from Collaterally Pursuing Claims Against Third Party/Guarantor, if Treated/Released in Confirmed Re-Org Plan
In New Falls Corp. v. LaHaye (In re LaHaye), No. 19-30795 (5th Cir. Nov. 12, 2021), the Fifth Circuit Court of Appeals prevented a secured lender from pursuing individual guarantors on a claim that had been partially released in the guarantors’ corporation’s confirmed bankruptcy plan of reorganization. New [...]
