Bankruptcy Law Commons^™

Granting Derivative Standing To A Creditors’ Committee, Jordan Milite

Bankruptcy Research Library

(Excerpt)

A party has “standing” (the right to challenge the conduct of another in court) when that person or entity has suffered an “injury in fact.” “Derivative standing” is when a person or entity other than the harmed party steps in to assert the claim in place of the harmed party. In a case under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”), a bankruptcy court may grant derivative standing to a creditors’ committee or similar body, rather than the bankruptcy estate itself, to bring a claim on behalf of a debtor’s estate. This often …

The Ability To Set And Enforce Bar Dates And Determine Untimely Administrative Expense Claims In A Chapter 11 Case, Kayla Nieves

Bankruptcy Research Library

(Excerpt)

Title 11 of the United States Code (the “Bankruptcy Code”) does not expressly provide that bankruptcy courts may set and enforce deadlines, i.e., “bar dates,” for administrative expense claims. The Bankruptcy Code also does not expressly define “timely” or “tardy” administrative expense claims. Courts, however, have interpreted sections 105 and 503 of the Bankruptcy Code as sufficiently broad to provide bankruptcy courts with discretion to establish bar dates and allow untimely filed administrative expense claims “for cause.”

This memorandum explores the decisions that have addressed a bankruptcy court’s ability to set and enforce bar dates and to determine what …

Constitutionality Of Non-Uniform Quarterly Fees, Michael Francis Pecorella

Bankruptcy Research Library

(Excerpt)

In the United States, there are two different government entities entrusted with overseeing the administration of cases under title 11 of the United States Code (the “Bankruptcy Code”). In all but two states, the Office of the United States Trustee, which is a part of the Department of Justice, oversees the administration of bankruptcy cases. In North Carolina and Alabama, the two states that do not have a United States Trustee system, a Bankruptcy Administrator, which is funded by and housed in the Judicial Conference, oversees the administration of bankruptcy cases. The U.S. Trustees and the Bankruptcy Administrators generally …

When A Critical Vendor May Be Insulated From Preference Liability, Michael A. Solimani

Bankruptcy Research Library

(Excerpt)

Under Title 11 of the United States Code (the “Bankruptcy Code”) a trustee or debtor in possession (“DIP”) may avoid certain payments made by the debtor to a creditor within ninety days prior to filing for bankruptcy, or one year if the creditor is an insider. The Bankruptcy Code contains certain defenses to preference claims. A court may also release a creditor from such claims. Such a release may be found in orders approving payment of pre-petition claims to a “critical vendor.” Absent such an express release, it is unclear whether a trustee or DIP is precluded from pursuing …

Circumstances Under Which A Court Will Dismiss A Chapter 11 Filing Made In Bad Faith, Nicholas Wogan

Bankruptcy Research Library

(Excerpt)

Under section 1112(b) of title 11 of the United States Code (the “Bankruptcy Code”), a bankruptcy court may dismiss a Chapter 11 filing “for cause.” It is a generally accepted principle that “for cause” dismissal includes dismissal of filings made in bad faith, and this concept originates in a need for bankruptcy courts to uphold the jurisdictional integrity of the Chapter 11 process from those who would seek to abuse it. Courts deciding whether dismissal for bad faith is warranted typically employ a two-step analysis: first to determine whether a bad faith filing is “cause” for dismissal under section …

Clarity About Comity: How Courts Have Attempted Greater Guidance For Chapter 15 Litigants, Sabrina Lieberman

Northwestern Journal of International Law & Business

Abstract

This note explores the development of courts’ refusal to extend comity to foreign representatives who have filed a proceeding under chapter 15 of the U.S. Bankruptcy Code. Congress adopted chapter 15 as part of a comprehensive 2005 bankruptcy reform. It allows foreign entities to receive protection under the U.S. Bankruptcy Code. In most cases, foreign representatives who file a chapter 15 proceeding are involved with ancillary insolvency proceedings outside the United States. There is often a question of how or if a U.S. court overseeing the chapter 15 proceeding will defer to a judgment or process within the foreign …

Restructuring Support Agreements: An Empirical Analysis, Anthony J. Casey, Frederick Tung, Katherine Waldock

Faculty Scholarship

Restructuring support agreements (RSAs), or contracts that commit bankruptcy parties to supporting a plan of reorganization that will conform to certain requirements, are now a common feature of Chapter 11. Parties utilize these agreements in nearly half of all large cases. While prior literature has debated the normative value of RSAs, we take an empirical approach to look at what provisions the parties include in these agreements and how those provisions have changed over time.

Our analysis looks at all RSAs associated with large bankruptcies through the end of 2020. We characterize the types of firms with RSAs, the parties …

Changes And Convergence Of Bankruptcy Law: Recent Experience In Brazil, Joao Guilherme Thiesi Da Silva

LL.M. Essays & Theses

Bankruptcy regimes across the globe have been constantly changing in response to new market demands and the evolution of insolvency law principles and objectives. Part of the academic community argues that such changes may lead to a convergence of domestic bankruptcy laws, as a result of globalization and market integration. Scholars have reviewed the phenomena of changes and convergence of bankruptcy laws in Europe, East Asia and Africa. However, little attention has been given to Latin American countries, such as Brazil. This paper aims at contributing to the discussion on changes and convergence of bankruptcy law, by focusing on four …

Cannabis Receiverships: The Alternative For State Legal Cannabis Businesses Seeking Financial Rehabilitation Locked Out Of Bankruptcy Court By The Controlled Substances Act, Ryan C. Griffith

Seattle University Law Review

This article explores how cannabis businesses suffer by being unable to utilize federal bankruptcy and explore state law receiverships as an alternative remedy to help cannabis businesses weather financial storms.

Part I explores the limitations and differences between a receivership and a bankruptcy. Part II discusses how state legal cannabis companies cannot seek financial rehabilitation in bankruptcy court due to cannabis being listed as a schedule I drug federally. Part III explores how receivership be used to help cannabis companies that cannot seek bankruptcy protection to financially rehabilitate themselves. Part IV details how a receiver can help a cannabis company …

Biting The Bullet: A Bipartisan Solution To Increase Debtors' Access To Chapter 7 Relief While Exempting Firearms In A Bankruptcy Case, Ishaq Kundawala

Articles

Imagine an individual who is too broke to file for bankruptcy relief.' This irony is far too often a reality in America, especially for people living in underserved communities. Debtors are simply unable to skimp and save up even a thousand dollars to pay their bankruptcy attorney. Paying their bankruptcy attorney upfront in full is the only ticket to seeking Chapter 7 bankruptcy relief. For a variety of reasons, Chapter 7 bankruptcy relief is the most advantageous type for a majority of poor and middle-class individuals and families.4 It provides these individuals and families with an expedient, fresh financial start …

Billing Judgment, Nancy B. Rapoport, Joseph R. Tiano Jr.

Scholarly Works

In most situations, when a lawyer sends a bill to a client, the client pays the fees. When the client believes that a fee or expense is unreasonable, the client will ask for reductions. Conscientious lawyers review a bill before sending it to the client, exercising judgment in terms of what fees and expenses are reasonable. But in bankruptcy cases, the estate pays the court-appointed professionals' fees and expenses out of unsecured funds or from a cash collateral carve-out. Thus, the responsibility for scrutinizing the fees and expenses falls not to a particular client, but to the court, per 11 …

Retribution Against Catholic Dioceses By Revival: The Evolution And Legacy Of The New York Child Victims Act Claims Revival Window, Marie T. Reilly

Catholic Dioceses in Bankruptcy

This article considers the evolution of limitations relief for time-barred child sexual abuse tort claims in New York culminating with the claims revival window enacted in 2019 as part of the New York Child Victims Act (NYCVA). The story of child sexual abuse litigation against Catholic dioceses and the legal and political history of the NYCVA exposes the important but largely unexplored balance of competing policy objectives that limitations laws strike. How child sexual abuse claimants achieved retribution by revival in the NYCVA reveals the fragility of limitations laws and the importance of coherent and consistent policy for revival of …

One Size Does Not Fit All Leases—It's Time To Amend Bankruptcy Code Section 365, Rachel Hudson

Emory Bankruptcy Developments Journal

For far too long, Bankruptcy Code Section 365 has caused confusion among parties to oil and gas leases when one party files for bankruptcy. This section of the Bankruptcy Code is intended to provide relief to debtors who are party to an unexpired lease or an executory contract, allowing a debtor-in-possession or trustee to make the decision to either assume or reject the agreement. While this concept is straightforward for standard lease agreements and contracts, courts have struggled to determine whether oil and gas leases actually fall into the category of a “lease” per se, an executory contract, or neither. …

Bankruptcy & The Benefit Corporation, Christopher D. Hampson

UF Law Faculty Publications

As pressure grows for money-making businesses to prioritize social responsibility, the benefit corporation - a recent innovation in corporate governance - promises to require the directors of socially minded businesses to balance public benefit with shareholder interests. But will that promise survive the crucible of financial distress? While most discussions of the benefit corporation give only passing treatment to insolvency (or ignore it altogether), this Article provides the first complete analysis of how bankruptcy principles would apply to benefit corporations, informed by the practical context of out-of-court workouts and negotiations that take place in the shadow of the bankruptcy laws. …

Putting With A Pitching Wedge: Indiscriminating Termination Of The Automatic Stay, Lawrence Ponoroff

Emory Bankruptcy Developments Journal

The serial filing of chapter 13 cases solely for the purpose of frustrating and delaying foreclosure or other legitimate collection efforts, and with no serious intent to reorganize, has long been perceived as an abuse of the bankruptcy system requiring a fulsome response. In 2005 Congress seized on a solution involving withdrawal or withholding of the automatic stay. Since it is the existence of the stay that most prompts abusive filings, the solution seemed appropriate. It was not for a variety of reasons examined in this article, but most notably because not all serial filings are abusive, and the stay …

Rethinking Roadblocks To Municipal Bankruptcy, Tejas Dave

Emory Bankruptcy Developments Journal

This Comment argues that Congress should remove roadblocks that prevent municipalities from easily filing for bankruptcy. It shows that statutory and ad hoc roadblocks allow states and the federal government to exert excessive pressure on fiscally distressed municipalities. Further, while scholars claim that the Bankruptcy Code provides bankruptcy courts with too little power to adjudicate municipal bankruptcies and that municipal fiscal distress should be resolved by states, this Comment argues that federal bankruptcy courts are the proper venue to resolve municipal distress and that these courts have sufficient power. This power could be used more effectively by removing chapter 9’s …

Waiver Of Discharge – Is It Ever Really Voluntary?, Laura B. Bartell

Law Faculty Research Publications

No abstract provided.

Failure Of Mobile Money Services: Standards For Systemic Risk, Jonathan Greenacre, Benjamin Geva

Articles & Book Chapters

Against an overview analyzing the mobile money system, this article provides a preliminary criterion for determining potential systemic risk of collapse of a mobile money firm (MM firm). The article has two main components: first, defining systemic risk, it clarifies that systemic risk is likely to arise through a delay in returning customers’ funds from an MM firm in insolvency proceedings. Second, the article points out that determining whether this delay will have systemic consequences ought to consider diverse elements, particularly, the range of components of the economy which could be impacted by the failure of an MM firm, the …

Riding The Wave: Fairness For Foreign Investors In India’S Impending Insolvency Tsunami, Nicole Mecca

Fordham Journal of Corporate & Financial Law

Reminiscent of the warning signs of a tsunami, bankruptcy and insolvency courts across the globe have been eerily calm despite unprecedented conditions during the COVID-19 pandemic. The full extent of the pandemic’s effect, including a tidal wave of wide-spread corporate and financial sector harm and wide-spread economic distress, remains to be seen. Much like victims of natural disasters, unsuspecting and increasingly delayed courts will find themselves totally overwhelmed. The inconvenience felt by the courts is distinct, however, from potential harm to financial investors. Although investors could also be harmed by these judicial conditions, they knowingly assumed certain financial risk when …

Reverse Vesting Orders – Developing Principles And Guardrails To Inform Judicial Decisions, Janis P. Sarra

All Faculty Publications

Reverse vesting orders (RVO) are a new tool being used by insolvency practitioners in Canada’s Companies’ Creditors Arrangement Act (CCAA) and other insolvency proceedings, where the debtor is not required to propose a restructuring plan and creditors are not permitted a vote on the going-forward strategy. The article starts from the premise that the court has authority to approve an RVO pursuant to sections 11 and 36 of the CCAA and the court’s general authority under the statute. However, it suggests that there must be exceptional circumstances for the court to be persuaded to bypass provisions of insolvency legislation aimed …