Here is a list of our most-viewed Bankruptcy Law articles in the past year. Topics include critical vendor treatment, landlords and administrative claims, claims in a reorg plan, avoiding clawback of settlement payments, debtor alter ego, lender liability, bankruptcy auctions, landlord-tenant issues and termination of lease and writ of possession, and more.
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Top 10 Bankruptcy Articles:
Critical Vendor Treatment in Bankruptcy
Critical vendor treatment in bankruptcy is a process that allows a debtor to pay a vendor its pre-petition claim based on the idea that the vendor is so important to the debtor’s business, that ending the relationship would make it very difficult if not impossible for the debtor to reorganize.
Landlords & Administrative Claims in Bankruptcy
Landlords are not always entitled to an Administrative Claim for non-payment of rent in a bankruptcy. When a debtor in bankruptcy rejects a contract…it ends the contractual relationship with the non-debtor counterparty – who is then left with a claim for damages.
Classifying Claims in a Plan of Reorganization – Creating and Accepting Class
A debtor is required to obtain the consent of at least one class of creditors to confirm its plan under the “cram down” provisions of Bankruptcy Code Section 1129(b). So, when courts address whether the plan unfairly discriminates against certain creditors, the issue is whether or not the debtor has unfairly created a class to accept its plan.
A Guide on How to Avoid a Clawback of a Settlement Payment of Securities
Subject to certain defenses, in a bankruptcy proceeding, transfers made to a creditor within 90 days of the transferor filing bankruptcy can be clawed back as a preference under the Bankruptcy Code. This article looks at Holliday v. Credit Suisse Securities (USA) LLC and the Safe Harbor Defense.
Does a Bankruptcy Discharge Protect the Debtor’s Alter Ego?
A look at Bankruptcy Section 524(a) in relation to prepetition debt, alter ego, and when a non-debtor attempts to recover a discharged debt.
Settlement Agreements Can Be Held Nondischargeable Debts in Bankruptcy
Prior to filing bankruptcy, a debtor settled an assault claim by agreeing to pay the victim/creditor in installments — up to a point. Bill Siegel looks at Hilgartner v. Yagi (In re Hilgartner) and whether collection costs and interest are dischargeable.
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 liquidation. Though it’s premature to say lender liability lawsuits are coming back, the opinion in Bailey Tool & Mfg. Co. v. Republic Bus. Credit (In re Bailey Tool & Mfg. Co.) is instructive regarding the actions a lender needs to avoid.
A Secured Creditor’s Right to Credit Bid in a Bankruptcy Sale
Generally speaking, when a debtor or trustee in bankruptcy seeks to sell certain assets, a secured creditor has a right to “credit bid” the secured portion of its claim. Discussion of the denial of credit bid in In re Figueroa Mountain Brewing, LLC.
Bankruptcy Auctions & the Establishment of Fair Market Value
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 obtained. Such a finding can preclude a subsequent clawback by creditors and/or rescission of the sale.
Landlord-Tenant Issues: Terminating a Lease and Writ of Possession
Generally, if a landlord terminates the lease, such termination cuts off the landlord’s damages at the date of termination. Therefore, if a landlord terminates the lease on January 1, 2023, the landlord cannot recover future damages beyond January 1, 2023. By contrast, if a landlord terminates only the tenant’s right to possession, the landlord can still periodically sue for rents as they come due.
