Bankruptcy

  • March 22, 2023

    Avenatti's Ex-Wife Owes $717K To Ex-Law Partner, Panel Says

    Michael Avenatti's ex-wife must turn over artwork and $717,000 in cash to cover part of the disgraced attorney's debts after his former law partner won an order requiring Avenatti to pay $4.85 million for work the former partner did at Eagan Avenatti LLP, a California appellate panel ruled Wednesday.

  • March 22, 2023

    FTX Reaches $404M Clawback Deal With Investment Firm

    FTX asked a Delaware bankruptcy judge on Wednesday to approve a settlement that would see the defunct crypto exchange claw back more than $404 million that its affiliated trading shop transferred to an investment firm prior to the exchange's collapse.

  • March 22, 2023

    Kabbage Wins Fights Over $1.5M Ch. 11 Settlement Payment

    A Delaware bankruptcy judge sided with financial services provider Kabbage Inc. on Wednesday when he decided the debtor is entitled to a $1.56 million payment under an earlier settlement reached with loan partner Customers Bank.

  • March 22, 2023

    Bondholders Denied Lien On Puerto Rico Utility Revenue

    A New York federal judge Wednesday ruled that holders of $8 billion in Puerto Rico Electric Power Authority bonds do not have a secured claim on its future revenues as the government-owned utility undergoes debt restructuring.

  • March 22, 2023

    SVB And FDIC May Be At Cross-Purposes In Ch. 11

    The holding company for the failed Silicon Valley Bank lost access to $2 billion in cash after the Federal Deposit Insurance Corp. took over the bank earlier this month, setting up an adversarial environment between the FDIC and the debtor — each of which have their own goals in their individual legal proceedings.  

  • March 22, 2023

    Chinese Exile Taps Brown Rudnick To Fight $1B Fraud Case

    Brown Rudnick LLP has signed on to represent exiled Chinese businessman Guo Wengui in a criminal case alleging he conned $1 billion in a series of fraudulent investment enterprises, including a media company he founded with former Donald Trump adviser Steve Bannon.

  • March 22, 2023

    Avaya Gets OK For $2.6B Equity-Swap Ch. 11 Plan

    A Texas bankruptcy judge on Wednesday approved an equity-swap Chapter 11 plan for Avaya Inc. that will cut the telecom giant's $3.4 billion in debt by 75% as it emerges from its second bankruptcy since 2017.

  • March 22, 2023

    J&J Plans High Court Appeal After 3rd Circ. Tosses Talc Ch. 11

    Johnson & Johnson plans to appeal the dismissal of its talc unit's Chapter 11 bankruptcy case to the U.S. Supreme Court, the company said Wednesday after the Third Circuit declined to reconsider a panel ruling that found the filing was not made in good faith.

  • March 22, 2023

    Celebrity Chef's Ex-CFO The Latest To Flip In Wage Suit

    A deal that would see a former business partner of celebrity chef Michael Isabella testify against his erstwhile co-defendant in an unpaid wage and overtime lawsuit is a fair shake for all parties, a federal magistrate judge ruled.

  • March 21, 2023

    SVB Financial Gets Ch. 11 Nod For $100M Cash Use

    The bankrupt parent company of the failed Silicon Valley Bank received court approval Tuesday in New York to use $100 million of its cash to fund its capital commitments for investment activities at its venture capital operation.

  • March 21, 2023

    3M Looks To Shield CEO From Vets' Questioning

    3M Co. urged an Indiana bankruptcy judge to stop creditors from deposing its chief executive amid the bankruptcy of a subsidiary facing thousands of claims over faulty earplugs, saying the CEO didn't have enough information on the Chapter 11 filing.

  • March 21, 2023

    Attys Seek Insurance For Arrested Businessman's $25M Boat

    Bankruptcy attorneys on Tuesday promised to lead a 24-hour scramble to find insurance for a $25 million yacht connected to exiled Chinese businessman Ho Wan Kwok, who filed for Chapter 11 bankruptcy in February 2022 and was arrested last week for allegedly perpetrating a $1 billion fraud scheme.

  • March 21, 2023

    Loyalty Ventures Gets OK For Ch. 11 Loan, Plan Solicitation

    Customer loyalty program operator Loyalty Ventures Inc. got permission from a Texas bankruptcy judge Tuesday to tap into $15 million in Chapter 11 financing and move forward with a vote on a liquidation plan.

  • March 21, 2023

    Bondholders Seek Ch. 11 For Mexican Media Conglomerate

    Three bondholders owed $63 million by Spanish-language television broadcast company TV Azteca filed involuntary Chapter 11 petitions in New York bankruptcy court late Monday for the company and dozens of affiliates, saying the bond obligations aren't being met.

  • March 21, 2023

    Stimwave Secures Ch. 11 Plan Confirmation In Delaware

    Remnants of bankrupt pain management device-maker Stimwave Technologies secured confirmation in a Delaware bankruptcy court Tuesday for a post-sale windup plan, with its previous owners left behind to face prosecution in a federal fraud action.

  • March 21, 2023

    Troubled California Debt Law Firm Seeks Ch. 11 Protection

    A California consumer debt law firm that's allegedly run by a disbarred attorney has filed for Chapter 11 bankruptcy protection, adding to a complex set of troubles that already includes a receivership, multiple investor and client lawsuits, and hundreds of consumer complaints.

  • March 21, 2023

    Justices Asked To End 'Hypothetical Jurisdiction' Circuit Split

    A proposed class of 4,300 Avoca, Pennsylvania, wood treatment workers on Monday asked the U.S. Supreme Court to decide a circuit split surrounding "hypothetical jurisdiction," a legal doctrine that the Second Circuit applied to throw out the workers' claims that law firm Montgomery McCracken Walker & Rhoads LLP cost them $619 million in previous bankruptcy proceedings.

  • March 21, 2023

    Celsius Gets OK For Deal To Return Account Holder Assets

    A New York bankruptcy judge on Tuesday approved a deal struck between Celsius Network and the holders of its so-called "Custody" accounts that will allow account holders who settle to begin immediate withdrawals of some of their cryptocurrency.

  • March 20, 2023

    Influencer To FTX Investors' Atty: 'You Made A Big Mistake'

    Counsel for a proposed class of investors in collapsed cryptocurrency platform FTX told a Florida federal judge on Monday that one of the suit's named defendants has been threatening and harassing one of the plaintiffs' attorneys through vulgar calls, emails, tweets and other social media posts, allegedly saying things like, "Expect a counter suit bitch."

  • March 20, 2023

    SVB Can't Transfer Accounts From Silicon Valley, FDIC Says

    Former Silicon Valley Bank parent SVB Financial Group cannot make Silicon Valley move SVB's accounts to a new bank, the Federal Deposit Insurance Corp. told a New York bankruptcy judge Monday, saying it would interfere with the FDIC's right to deny SVB insurance coverage for its accounts.

  • March 20, 2023

    NantCell Kicked Off Creditor Committee In Sorrento Ch. 11

    A Texas judge removed NantCell Inc. from the unsecured creditors committee in the Chapter 11 case of drugmaker Sorrento Therapeutics on Monday, saying the group's activity is hampered by procedures put in place to address NantCell's conflicts of interest in the case.

  • March 20, 2023

    Regulators Extend SVB Bidding, Give OK To Signature Deal

    Federal regulators said Monday that they will allow more time for bids on the remnants of Silicon Valley Bank as it inched closer to a potential breakup, while Flagstar Bank received a regulatory blessing for its weekend deal to scoop up deposits and assets from former Signature Bank.

  • March 20, 2023

    FDIC Wants Failed Signature Bank's FTX Fraud Suit Paused

    The Federal Deposit Insurance Corp. asked a New York federal judge on Monday to pause a proposed class action against Signature Bank over its ties to FTX, arguing federal law requires the claims be exhausted first in administrative court since the bank has been put in the receivership of the FDIC.

  • March 20, 2023

    3M Unit Hits Back At Bids To Toss Bankruptcy Case

    A 3M subsidiary placed into bankruptcy to address thousands of liability claims over faulty earplugs has urged an Indiana federal judge not to toss its bankruptcy case, saying the earplug plaintiffs hadn't shown it had acted in bad faith.

  • March 20, 2023

    Orrick To Rep Ex-SVB CEO In Shareholder Suits

    Orrick Herrington & Sutcliffe LLP attorneys will represent the embattled former CEO of Silicon Valley Bank in shareholder actions launched on the heels of the bank's stunning failure.

Expert Analysis

  • CFPB And FTC Take Their Place As Powerful Crypto Cops

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    While they're not the primary federal regulators of digital asset activity, the Federal Trade Commission and Consumer Financial Protection Bureau have begun expanding oversight in the area, so organizations should anticipate increased scrutiny from the pair over certain aspects of the crypto marketplace, say attorneys at Greenberg Traurig.

  • A Bankruptcy Doctrine May Soon Be Before The High Court

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    The Fifth Circuit's recent use of the Barton doctrine, where the court recommitted to dismissing claims against court-appointed fiduciaries when plaintiffs fail to obtain permission before bringing suit, stands in contrast to Eleventh Circuit limitations, meaning the issue may be ripe for U.S. Supreme Court review, say Maxwell Weiss and Daniel Lowenthal at Patterson Belknap.

  • Establishing A Record Of Good Faith In Mediation

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    Viacom v. U.S. Specialty Insurance, and other recent cases, highlight the developing criteria for determining good faith participation in mediation, as well as several practical tips to establish such a record, says Richard Mason at MasonADR.

  • After SVB Collapse, A Lesson In Patents As Debt Collateral

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    The cautionary tale of Silicon Valley Bank's recent failure highlights the importance of the proper securitization of intellectual property pledged as collateral, with five critical steps for perfecting security interests and protecting lenders' and creditors' rights, says Gregory Campanella at Ocean Tomo.

  • SEC's Proposed Custody Rule Changes And What They Mean

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    The U.S. Securities and Exchange Commission's proposal to reclassify the Custody Rule as the Safeguarding Rule represents a potentially fundamental shift in how investment advisers select and transact in certain types of client assets, and there are key practical issues advisers and other market participants can consider ahead of its adoption, say attorneys at Katten.

  • ABA Opinion Should Help Clarify Which Ethics Rules Apply

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    A recent American Bar Association opinion provides key guidance on interpreting ABA Model Rule 8.5's notoriously complex choice-of-law analysis — and should help lawyers authorized to practice in multiple jurisdictions determine which jurisdiction's ethics rules govern their conduct, say attorneys at HWG.

  • How Crypto-Friendly Bank Failures Will Change Tech Industry

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    The recent failures of Silicon Valley Bank, Signature Bank and Silvergate Capital are likely to result in significant shifts in how the global tech industry and its financial partners address legal, compliance, regulatory and business risks, says Erin Bryan at Dorsey & Whitney.

  • 4 Ways To Reboot Your Firm's Stalled Diversity Program

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    Law firms that have failed to see real progress despite years of diversity initiatives can move forward by committing to tackle four often-taboo obstacles that hinder diversity, equity and inclusion efforts, says Steph Maher at Jaffe.

  • Opinion

    'Day-In-Court' Ideal Is Distracting From Victim Recovery

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    As the number of high-profile, mass tort claims rises, preserving a few victims' right to a day in court should not permeate discussions — the overriding objective should be securing a collective of meritorious claimants the largest recovery possible on the shortest timeline, often through bankruptcy, says Samir Parikh at Lewis & Clark Law School.

  • Top Questions, And Lessons, After Banking's Wild Weekend

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    While regulators alleviated some immediate concerns related to Silicon Valley Bank and Signature Bank, even companies with minimal exposure to the failed institutions should monitor unfolding policy changes, cash management issues and increasing scrutiny on risk disclosures for public companies, say attorneys at Morgan Lewis.

  • DOJ's Google Sanctions Motion Shows Risks Of Auto-Deletion

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    The U.S. Department of Justice recently hit Google with a sanctions motion over its alleged failure to preserve relevant instant-messaging communications, a predicament that should be a wake-up call for counsel concerning the danger associated with automatic-deletion features and how it's been handled by the courts, say Oscar Shine and Emma Ashe at Selendy Gay.

  • How Companies Can Use Gov't Funding Amid Bankruptcy

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    As the risk of economic dislocation continues, a look back at four pandemic-era Chapter 11 cases — including their dismissal and eventual reinstatement — highlights a strategy businesses may use where government conditions financial assistance on an applicant not being in bankruptcy, say Matthew McGuire and Howard Robertson at Landis Rath.

  • What To Expect From A Litigation Finance Industry Recession

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    There's little data on how litigation finance would fare in a recession, but a look at stakeholders' incentives suggests corporate demand for litigation finance would increase in a recessionary environment, while the number of funders could shrink, says Matthew Oxman at LexShares.

  • A Look At The Feds' Extraordinary Reaction To SVB Collapse

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    With the receiverships of two banks in almost as many days, the emerging pattern of regulatory response holds the banking sector as a whole responsible for losses at individual institutions, a scenario that may not end with special assessments to cover Silicon Valley Bank and Signature Bank, say attorneys at WilmerHale.

  • Key Considerations For Taxpayers Deducting Crypto Losses

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    While a recent Internal Revenue Service memorandum is helpful in providing insight into how the agency is considering guidance related to cryptocurrency, questions remain with respect to whether a taxpayer can claim a tax deduction for cryptocurrency losses, say attorneys at McDermott.

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