Zone of Insolvency

Zone of Insolvency

Christy Rivera (US)

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Second Circuit Adopts “Efficient Market” Approach to Calculate Cramdown Interest

Posted in US
Last week, the Second Circuit established an “efficient market”-based approach for calculating cramdown interest rates. Adopting a test established by the Sixth Circuit, the Second Circuit held that courts must apply a market interest rate where an efficient market exists. See Momentive Performance Materials Inc. v. BOKF, NA (In the Matter of: MPM Silicones, L.L.C.),… Continue Reading

Restructuring Newswire Fall 2017

Posted in Presentations
Norton Rose Fulbright released its Restructuring Newswire for the Fall 2017.  Find the following topics in this issue: Supreme Court to decide scope of safe harbor protections against avoidance claims Extraterritoriality and the Bankruptcy Code: the uncertain reach of the US avoiding powers Sales of inventory:  Third Circuit clarifies the meaning of “received” under section… Continue Reading

Good News/Bad News in Keeping Affiliates out of Bankruptcy

Posted in US
A bankruptcy filing by one company does not necessarily mean that its affiliates will also file for bankruptcy. It is common for a financially distressed company to file for bankruptcy while its financially sound affiliates continue business operations in the ordinary course. The bad news, however, is that a court may disregard a company’s decision not… Continue Reading

Lenders Beware: Diligence Needed to Protect that Guarantee Claim From Substantive Consolidation in Bankruptcy

Posted in Latin America, US
Last month, the Bankruptcy Court for the Southern District Of New York overruled an objection to proposed substantive consolidation provisions included in the plan of reorganization for Republic Airways Holdings Inc. See In re Republic Airways Holdings Inc., 565 B.R. 710 (Bankr S.D.N.Y. 2017). The bankruptcy court’s ruling provides a good refresher on the requirements… Continue Reading

International Restructuring NewsWire Winter 2015

Posted in Presentations
Chadbourne released its Winter 2015 International Restructuring NewsWire this week. Find the following topics (and more) in the Winter 2015 issue: The Year in Review: U.S. Bankruptcy and Restructuring Matters Think Twice Before Entering into a Pre-Filing Restructuring Support Agreement Review of Chapter 15 Cases in 2014: Relief Available to a Foreign Representative Stern v.… Continue Reading

Second Circuit Applies Safe Harbor to Protect Withdrawals Made by Madoff Customers

Posted in US
Focusing on the plain language provided in Bankruptcy Code section 546(e), the Court of Appeals for the Second Circuit this week held that customers of the now defunct Bernard Madoff Investment Securities LLC can retain funds they had withdrawn from their customer accounts before the Madoff firm was placed into liquidation.  Irving Picard, the trustee… Continue Reading

An Apparent Victory for Subsequent Transferees

Posted in US
The Bankruptcy Code gives broad avoidance powers to debtors, allowing them to “unwind” transactions occurring relatively shortly before the bankruptcy filing in order to recover funds for the benefit of the debtor’s creditors. Indeed, debtors may in certain circumstances recover from subsequent transferees of the initial transferee. These broad avoidance and recovery powers are generally… Continue Reading

A Refresher on Lender Liability

Posted in US
Lenders should take comfort in a recent bankruptcy court decision in Maryland dismissing a creditor’s attempt to equitably subordinate a construction lender’s claim against their common debtor. See Atlantic Builders Group, Inc. v. Old Line Bank, et al. (In re Prince Frederick Investment, LLC), Bk. No. 12-20900-TJC, Adv. No. 13-00461, (Bankr. Md. September 9, 2014).… Continue Reading

Lehman Decision Highlights Quirk in Bankruptcy Code Subordination Provision

Posted in US
In a recent decision in the Lehman Brothers Inc. (LBI) SIPA proceeding, the bankruptcy court used Bankruptcy Code section 510(b) to subordinate a creditor’s claim – arguably a straight-forward matter of applying the statute’s language to the claim asserted. The statute, however, seems poorly equipped to address the scenario presented by creditor Claren Road and… Continue Reading

Remembering Judge Lifland

Posted in Uncategorized
We were deeply saddened to learn of the passing of the Honorable Burton R. Lifland on January 12, 2014. Many of us have practiced before Judge Lifland over the years, during his time as the former chief and bankruptcy judge of the Southern District of New York, and we will remember him as an extremely… Continue Reading

Surprise! A Good Decision for Derivatives Counterparties in the Lehman Cases

Posted in US
Those active in the derivatives market may be familiar with the Bankruptcy Code’s “safe harbor” provisions. These provisions are intended to protect derivatives participants from some of the debtor-friendly effects of bankruptcy, all in the name of ensuring market stability if a large derivatives market firm were to fail. The safe harbor provisions have been… Continue Reading

When is Cause, “Cause” Enough?

Posted in US
When companies file for bankruptcy, they receive the immediate protection of an “automatic stay,” which halts all creditors’ collection activity and lawsuits seeking to recover funds from the debtor. This automatic stay provides debtors with a much needed “breathing spell” to get themselves organized and on the way, if possible, to reorganization. However, creditors are… Continue Reading

Video Excerpts from Chadbourne Conference on Bankruptcy Examiners

Posted in Presentations, US
This past October, Chadbourne hosted a panel conversation among several bankruptcy experts on the topic of examiners in chapter 11 mega-cases.  We provided a synopsis of the program and its materials here.  Below is a selection of video clips from that program focusing on some of the key takeaways and panelist observations.  The panelists included in the… Continue Reading

Chadbourne Hosts Panel on Examiners at Annual Bankruptcy Conference

Posted in Presentations
On October 22, 2013, Chadbourne & Parke hosted its seventh annual bankruptcy and restructuring conference at its offices in Rockefeller Plaza. This year, the event focused on the emerging roles for bankruptcy examiners in contested Chapter 11 mega-cases, and the panel brought together individuals with different viewpoints and past experiences working with (or as) examiners.… Continue Reading

Only Authorized Debtors Allowed

Posted in US
On September 30, 2013, the Bankruptcy Court for the Eastern District of North Carolina provided a succinct reminder of how important it is to carefully draft, and then comply with, the terms of a limited liability company’s operating agreement.  In a short decision, the court dismissed the bankruptcy filing of a limited liability company because… Continue Reading