A split among courts continues to persist with respect to the statutory interpretation of 11 U.S.C. § 1325(a)(5)’s equal-monthly-payment provision and the prioritization of payments of the debtor’s attorney’s fees pursuant to 11 U.S.C. § 1326(b)(1).
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It often comes as an unwelcome surprise when debtors discover that they cannot force a creditor to take something back that the debtors no longer want, no longer use and no longer intend to pay for.
A chapter 11 debtor’s executives might find little motivation to remain employed at a company as annual bonus plans become compromised and long-term incentive vehicles (e.g., stock options, restricted stock) become virtually worthless.
On January 17, the Fifth Circuit released a highly anticipated decision, weighing in on the expanding circuit split concerning the enforceability of contractual make-whole provisions in loan indentures.
Releases in conformation orders do not always protect against subsequent litigation or liability. DVL Inc. and DVL Kearney Holdings LLC (collectively, “DVL”) filed a lawsuit in the U.S. District Court for the District of New Jersey against Congoleum Corp., which in turn sued Bath Iron Works Corp.
Investors and those representing them go to great lengths to maximize the value of their deals in § 363 asset purchases. But if they’re not careful, they could easily find themselves in the following auction scenario, where a little ambiguity jeopardizes significant value that a “stalking horse” bidder thought it had already negotiated.
Over the past several years, financially distressed companies have increasingly used bankruptcy as the preferred method to sell significant assets or entire businesses.
Setoff is a valuable state law remedy for trade creditors with a claim against, and an obligation owing to, an insolvent customer. The right of setoff allows a creditor to “net” or cancel mutual debts to avoid having to pay its debt to a debtor in full while standing in line to recover its claim against the debtor.
Bankruptcy Judge Brendan L. Shannon recently confirmed the chapter 11 plan of RMH Franchise Holdings, Inc. and its affiliated debtors, notwithstanding that the plan proposed significantly better treatment for unsecured trade creditors than for other general unsecured creditors.
