The U.S. Court of Appeals for the Third Circuit recently became the first circuit court to address the question of whether a corporate parent can set off an obligation that it owes to a bankrupt company against a claim owed
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Bankruptcy
Podcast: Bankruptcy During COVID-19 Pandemic
2020 is on pace to set a record as the busiest year for bankruptcy filings since the Great Recession. In this episode on Kelley Drye Legal Download podcast, Bankruptcy and Restructuring Partner Bob LeHane and Special Counsel Jennifer Raviele discuss
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COVID-19: “Avoiding” Harm to Corporate Good Samaritans
The impact of COVID-19 is being felt at all levels of the economy and will work its way through bankruptcy courts for years to come. In these early days, many creditors who are themselves suffering are providing assistance to troubled…
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Third Circuit Ruling on Constitutional Authority of Bankruptcy Courts Can Provide Guidance for the Looming Wave of COVID-19 Cases
The economic fallout from the COVID-19 pandemic will leave in its wake a significant increase in commercial chapter 11 filings. Many of these cases will feature extensive litigation involving breach of contract claims, business interruption insurance disputes, and common law…
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COVID-19: Small Business Bankruptcy Relief
Last week, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law, implementing broad relief for individuals and businesses affected by COVID-19. One of the sections of the CARES Act receiving less attention is a temporary amendment…
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COVID-19: Modified Bankruptcy Court Procedures
As the nation hunkers down to combat the novel coronavirus (COVID-19), bankruptcy courts throughout the country have moved quickly to implement procedures to preserve access to the courts while limiting in-person interaction during the crisis. Each court’s specific COVID-19 procedures…
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A Season of Viral Disruption
Social distancing. Elbow bumps. Flatten the curve. These are the new phrases and behaviors we have learned to avoid exposure to the novel coronavirus (COVID-19). This epic struggle forces us to reexamine and reevaluate our daily habits, lifestyles and customs as we work collectively to minimize the harm to our families, friends and neighbors throughout the United States. While some of the lifestyle changes and limitations will be temporary, the human and economic effects of COVID-19 will be profound and, as always, the disruption undoubtedly will lead to increased innovation and societal change.
In the restructuring arena, many effects are direct and foreseeable. Workers and businesses in the travel, restaurant, retail, hospitality and gaming industries will be immediately and severely challenged as their customers choose or are forced to stay home. The Centre for Aviation reports that without a significant government bailout, several major airlines will be bankrupt by mid-May. Government mandated shopping center and restaurant closures will exacerbate the already severe challenges facing the retail industry, and disruptions in the global supply chain create inventory pressures for retailers and manufacturers alike. And, as employees suffer reductions in the work-force, reduced income, medical debt and stock market losses, discretionary spending will decrease. Regardless of whether you were bullish or bearish on 2020 last week, the financial impact of COVID-19 will be real and undeniable.
Paid in Full in Bankruptcy and the Unwary Creditor
If it sounds too good to be true, it probably is. But does that age-old maxim apply to a bankrupt customer offering to pay you 100% of your unsecured claim through a “prepackaged” bankruptcy or under a critical vendor program?…
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Mission Products v Tempnology – Supreme Court Declines to “Vaporize” Licensee’s Rights Under Rejected Trademark License Agreement
The Supreme Court this week resolved a long-standing open issue regarding the treatment of trademark license rights in bankruptcy proceedings. The Court ruled in favor of Mission Products, a licensee under a trademark license agreement that had been rejected in…
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The Devil’s Triang(ular Setoff) – Delaware Judge Rejects Corporate Parent’s Attempt to Set Off Debt Owed to Subsidiary
Few issues in bankruptcy create as much contention as disputes regarding the right of setoff. This was recently highlighted by a decision in the chapter 11 case of Orexigen Therapeutics in the District of Delaware. Judge Kevin Gross denied a …
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