The balance of power has shifted substantially away from debtors over the years. Although it has been perhaps understandable in connection with single asset real estate cases, the changes that negatively impact other types of operating business, such as the limitations on extensions of exclusivity and the time period to assume or reject leases, have greatly restricted debtors' abilities to reorganize, says David Neff, co-chairman of Perkins Coie LLP's financial transactions and restructuring practice.
A group of junior secured bondholders on Monday said it is ready to put together a reorganization plan for Residential Capital LLC, urging a New York bankruptcy judge to deny the fallen mortgage servicer’s request for more time to file a plan before others can be offered.
The Chapter 7 trustee for HomeBanc Mortgage Corp. on Monday asked a Delaware bankruptcy judge to approve a $3.25 million settlement of a $100 million adversary proceeding it asserted against Bear Stearns & Co. Inc. over securities repurchase agreements between Bear Stearns and HomeBanc.
Bankrupt Eastman Kodak Co. announced Monday that it intends to spin off its document imaging business to its largest creditor, the U.K. Kodak Pension Plan, for $650 million in a comprehensive deal that would settle $2.8 billion in claims by the pension plan and move the photography pioneer closer to a Chapter 11 exit.
BBX Capital Asset Management LLC has accused a Palm Beach real estate developer of hiding $64 million offshore and putting his company into Chapter 11 protection to avoid paying a $45 million judgment the lender won in a state court proceeding.
The creditors committee for former battery maker A123 Systems Inc. asked a Delaware bankruptcy judge Monday to disallow General Motors LLC's $27.9 million claim for rejection damages, saying the automaker failed to provide any documentation to justify the figure.
Rotech Healthcare Inc. on Friday asked a Delaware bankruptcy judge to disband the recently formed shareholders committee, with the medical equipment maker saying it shouldn't be forced to foot the bill for a group that has no economic interest in the Chapter 11 case.
A former employee at a bankrupt Atlanta-based utility-grid services firm filed a class action against the company’s private equity parent Friday, alleging that Navigation Capital Partners Inc. ultimately made the decision that led to mass layoffs without the 60 days' notice required by law.
A Delaware bankruptcy judge on Monday signed off on joint Chapter 11 plans for Dex One Corp. and SuperMedia Inc., sealing a merger of the two Yellow Pages publishers that has been more than two years in the making.
Bankruptcy filings across the country have continued their downward trend, falling 14.4 percent over the last year, according to a report released Monday by the Administrative Office of the U.S. Courts.
More than 1,000 union miners and their allies protested at a rally in St. Louis on Monday as Patriot Coal Corp. began a critical hearing in bankruptcy court on its bid to force retiree benefit cuts and other concessions from the union.
The U.S. Supreme Court declined Monday to hear an appeal from a pair of investors contesting Charter Communications Inc.’s controversial prepackaged bankruptcy plan, leaving in place a Second Circuit ruling that raised the bar for parties appealing bankruptcy court decisions.
My suggestion would be to permit preference recoveries only if some stated percentage — more than 50 percent — of a gross recovery is actually redistributed to unsecured creditors, says Jay Jaffe, a partner in Faegre Baker Daniels LLP's finance and restructuring practice.
Ambac Financial Group Inc. is set to exit bankruptcy within days thanks to a judge's approval Monday of a $101.9 million settlement with the Internal Revenue Service to end a dispute over tax liabilities from certain contracts Ambac signed years ago.
LifeCare Holdings Inc. and its creditors committee reached a settlement Friday that would provide unsecured creditors with about $3.5 million in cash in exchange for the committee supporting the hospital group's Chapter 11 plan, which includes its $320 million sale to private equity firm Carlyle Group LP.
A Texas bankruptcy judge on Thursday recommended that the district court take over adversary suits against ATP Oil & Gas Corp. concerning two offshore-drilling royalty deals worth $135 million, but not until the case goes to trial.
A group of lenders and noteholders, including Silver Point Capital LP, on Thursday dismissed concerns from unsecured creditors of K-V Pharmaceutical Co. about the bankrupt company’s disclosure statement for its potential reorganization plan, saying the creditors’ objections are “simply wrong.”
AMR Corp. on Thursday asked a New York bankruptcy judge to sign off on $3.25 billion in exit financing that would be secured by American Airlines Inc.'s assets in its Latin American travel routes and provide extra liquidity for its eventual emergence from bankruptcy.
The bidding war for Onex Corp.'s Carestream Health Inc. is down to just Bain Capital LLC and Thomas H. Lee Partners LP, while leading energy-focused private equity firm First Reserve Corp. plans a second global infrastructure fund.
A group of preferred shareholders of bankrupt oil and gas producer GMX Resources Inc. became the latest party Thursday to object to the company’s request for $50 million in debtor-in-possession financing, arguing that the loan terms give an “unfair advantage” to secured creditors if the firm were to be sold.
In a potentially landmark judgment for investors in highly rated but risky synthetic financial products that were hit hard by the recent financial crisis, the Australian Federal Court recently ruled that Standard & Poor’s and ABN Amro Bank NV should pay damages to investors. The case undermines the suggestions that any views expressed by rating agencies are only for the benefit of the issuer involved and that rating agencies merely give opinions rather than investment advice — an argument that has been deployed in an effort to defeat similar cases brought across Europe and in the U.S., say attorneys with Brown Rudnick LLP.
In the context of single asset real estate cases where guarantees are common, the In re 18 RVC LLC bankruptcy court's stricter standard for determining whether deficiency claims are substantially similar to other unsecured claims weakens a debtor’s ability to cram down. Nonetheless, debtors will likely continue to rely on In re Loop’s more favorable standard, while it appears, at least in New York, that courts will not be so inclined, says Andriana Mavidis of Weil Gotshal and Manges LLP.
Subscription credit facilities have become a popular form of financing for private equity and real estate funds. While sovereign debt concerns have led to increased scrutiny of the credit wherewithal of such investors, the good news is that these facilities have been around for many years and anecdotal evidence from active lenders in the market during the financial crisis indicates that there have been no material governmental investor defaults, despite significant budget issues faced by many governmental investors, say attorneys with Mayer Brown LLP.
In a significant ruling applicable to all cases pending in the New York City Asbestos Litigation, Judge Sherry Klein Heitler recently held that plaintiffs must disclose to defendants all materials submitted in connection with any claims filed with asbestos-related bankruptcy trusts established pursuant to 11 U.S.C. 524(g). The decision thus authorizes discovery of plaintiffs’ full exposure history and is an important victory for the defense in the NYCAL, say attorneys with Nixon Peabody LLP.
The Dynegy bankruptcy case demonstrates how dangerous it might be for companies to engage in major asset restructuring right before a bankruptcy filing. The clever minds behind the Dynegy pre-bankruptcy restructuring plan may have been too clever in the end, say Karen Hart and Nicole Eason of Bell Nunnally & Martin LLP.
A common interrogatory or deposition question often posed to a plaintiff in an employment lawsuit is: “Have you filed for bankruptcy, and if so, when?” This question is not academic. The answer, in fact, could have significant implications for the prosecution of an employment lawsuit, including dismissal of the lawsuit or requiring substitution of parties. The recent decision from the Sixth Circuit in Auday v. Wet Seal Retail Inc. is instructive in this regard, says Jeffrey Kopp of Foley & Lardner LLP.
The Ninth Circuit decision in In Re Loop 76 LLC appeared to make it much simpler for a debtor to engineer a successful “cramdown” by permitting the separate classification of two otherwise similarly situated creditors, where one of them is the beneficiary of a third-party guaranty. But at least two subsequently published decisions in which debtors tried to invoke the panel’s reasoning suggest that other courts may be reluctant to follow suit, say Steven Wilamowsky and Henry Healy of Bingham McCutchen LLP.
Performing an annual stress test can help your law firm assess the key areas of firm governance, financial reporting, risk management, fiduciary practices and financial health and prepare your law firm to weather both internal and external threats. This assessment can be a valuable tool to identify potential weaknesses and avoid the pitfalls that have caused the downfall of so many prominent law firms, say members Kaufman Rossin & Co.
Until recently, the vast majority of M&A activity in Israel was strategic and focused in the technology space. But a number of recent developments foretell two new trends: the emergence of financial buyers, including private equity buyout funds and investors playing in the distressed space, to complement the existing strategic M&A activity in Israel, and increased activity in a plethora of business sectors, says Joey Shabot of Greenberg Traurig LLP.
The bad boy guaranty is ubiquitous in modern commercial mortgage financing transactions, but the actual carve-out provisions themselves tend to vary from lender to lender. What was once a relatively straightforward list of limited bad acts has, in some cases, mushroomed into dozens of complex provisions designed to cover every conceivable instance where a borrower could possibly go astray, say John St. Jeanos and Nicholas Melillo of Herrick Feinstein LLP.