Bankruptcy

Subscribe to Bankruptcy

Section 365 of the Bankruptcy Code allows debtors to “assume” unexpired leases, recommitting themselves and their counterparties to the existing lease terms, subject to approval by the Bankruptcy Court.  If there are existing defaults under the lease, section 365(b) appears…
Continue Reading Nobody’s Default? Ninth Circuit to Decide Whether Defaults Need to be ‘Material’ Before Landlords Get Adequate Assurance Under the Bankruptcy Code

A recent decision by Delaware Bankruptcy Judge John Dorsey will limit the ability of bankruptcy trustees to expand the lookback period for avoiding pre-bankruptcy transfers beyond the four years provided under most state law fraudulent conveyance statutes.  In dismissing a…
Continue Reading Ten Years Gone – Delaware Bankruptcy Judge Rejects Effort to Extend Lookback Period for Avoidance of Pre-Bankruptcy Transfers

In March, the U.S. Court of Appeals for the Second Circuit joined a growing majority of courts with Springfield Hospital, Inc. v. Administrator for the U.S. SBA, holding that no matter how forgiving its terms, a CARES Act’s Paycheck…
Continue Reading Second Circuit Split Resolved: No PPP Loans for Debtors in Bankruptcy

For now, the Subchapter V debt limit is back down to $2.7 million.  Overshadowed by the contentious confirmation hearings for historic Supreme Court nominee Ketanji Brown Jackson, the Senate Judiciary Committee failed to act on proposed legislation that would have…
Continue Reading Preoccupied Congress Fails to Act, Sending Debt Limit Back Down to $2.7 Million and Reducing Availability of Subchapter V Protection for Small Businesses

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…
Continue Reading The Devil’s Triang(ular Setoff), Revisited – Third Circuit Affirms Denial of Corporate Parent’s Attempt to Set Off Debt Owed to Subsidiary

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…
Continue Reading Third Circuit Ruling on Constitutional Authority of Bankruptcy Courts Can Provide Guidance for the Looming Wave of COVID-19 Cases