On July 31, 2014, Puerto Rico’s nonvoting congressional delegate Pedro Pierluisi introduced legislation (H.R. 5305)[1] that would empower Puerto Rico to authorize certain government-owned corporations to restructure their debt obligations under chapter 9 of the U.S. Bankruptcy Code. According to press reports, the U.S.
Courts have long grappled with the question of whether “stripping” an unsecured junior lien is permitted by § 506 of the Bankruptcy Reform Act of 1978 (the Bankruptcy Code).[1] In 1992, in the case of Dewsnup v. Timm, the Supreme Court granted certiorari on the topic, holding that “stripping down” partially unsecured junior liens was not permissible under the plain meaning of the Code.[2] Recently, however, the practical implications of the intersection of § 506(a) and (d) of the Code have been in flux as courts across the country weigh in on the distinction between “stripping down” and “stripping off.”
A recent decision by Bankruptcy Judge Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware, In re Optim Energy, LLC, et al.,[1] highlights a shift in Delaware recharacterization jurisprudence. In that case, Walnut Creek Mining Co., debtor Optim Energy’s largest unsecured creditor, sought standing to pursue recharacterization, equitable subordination and fiduciary duty claims on behalf of the estate against the secured lenders, who were also equity-holders, after no committee of unsecured creditors was appointed.
Editor’s Note: ABI hosted a webinar entitled “The 1111(b) Election: Advanced Mathematics and Strategies” in June. Visit ABI’s Distance Learning site at cle.abi.org to purchase recordings of this webinar.
Readers may be familiar with the continuing debates over universalism (one court and one insolvency law) vs. territorialism (many courts and many insolvency laws) that have dominated discussions of cross-border insolvencies in recent years.[1] Realizing that true universalism is an ideal that is unlikely to come to pass in the real world, universalists have generally embraced a modified universalism that acknowledges circumstances that make it proper and (practically and politically) necessary to recognize and protect certain local interests.
A petition for writ of certiorari in the ongoing dispute between bankrupt Qimonda AG and certain licensees has been filed in the U.S. Supreme Court and briefing on the petition was recently completed. On Dec. 3, 2013, the U.S. Court of Appeals for the Fourth Circuit affirmed[1] the U.S.
Once disfavored, non-compete agreements — contractual provisions prohibiting employees from competing with their former employers upon the relationship’s termination — have acquired new legitimacy in recent decades.
A major part of the anatomy of a turnaround is the weekly cash flow. A deceptively simple exercise, it presents a powerful tool for supporting complex management decisions. Applied during a restructuring process in a myriad of circumstances, it can serve as a basis for valuation from free cash flow or the foundation of a plan of liquidation.
Editor's Note: The following article, "Bridging the Gap: Receivership and the Absence of Discipline in Chapter 9," won the prize for second place in the Sixth Annual ABI Bankruptcy Law Student Writing Competition. The author, Randall Thomas, is a student at New York University School of Law.
Many Americans are questioning the future solvency of the Social Security program and, although its severity is inconclusive, many doubt that they will receive Social Security payments, causing them to seek additional financial arrangements.
