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People wait to enter U.S. Bankruptcy Court in New York Feb. 2, 2010.
Brendan McDermid/Reuters
The number of U.S. corporate bankruptcy filings increased nearly 13% in January, while bankruptcy filings overall declined. There were a total of 2,802 businesses that filed for bankruptcy in January, almost a 13% uptick from the 2,481 in January 2015, according to data from claims agent Epiq Systems Inc. Meanwhile, total U.S. bankruptcy filings fell 11% in the past year to 52,522. Restructuring lawyers and advisers primarily pointed to the oil and gas and commodities sectors for the uptick, which is expected to continue throughout 2016. “We see the increase in corporate filings to be principally attributable to the impact of sustained reductions in the price of oil and other commodities, and pressures on retail sales,” said Michael A. Rosenthal, co-chair of Gibson, Dunn & Crutcher’s restructuring practice.

Read More from: WSJ.com: Bankruptcy Beat

9 hours 41 min ago
A seminar promoter owed nearly $24 million for arranging speaking gigs for Robert Kiyosaki, the best-selling author of “Rich Dad Poor Dad,” is fighting for access to a secret lawsuit. Lawyers for Learning Annex LLC, which has accused Mr. Kiyosaki of moving “tens of millions of dollars plus other lucrative assets” among his companies to avoid making royalty payments, are now arguing to unseal an August 2014 lawsuit that appears to cover similar ground. The request comes during Learning Annex’s long-running fight to collect from Rich Global LLC, the entity that licenses the “Rich Dad Education” brand and the Rich Dad logo. Court papers show that Rich Global took in more than $45 million in royalties from the Rich Dad seminar business from March 31, 2007, to April 31, 2010. But after Learning Annex accused Rich Global of withholding royalty payments under their agreement, Rich Global filed for bankruptcy protection—saying it only had $1.8 million worth of assets. The bankruptcy filing put Wyoming lawyer Tracy Zubrod in charge of looking for ways that Rich Global can pay off its debts, including the royalties owed to Learning Annex. In August 2014, she sued Mr. Kiyosaki and several of his companies—litigation that has unfolded under seal.

Read More from: WSJ.com: Bankruptcy Beat

9 hours 53 min ago
The bankruptcy process is often long and arduous for clients, whether debtor or creditor, and their counsel.  Bankruptcy courts feel the pain, too.  So, when we finally reach the glorious goal of plan confirmation, most revel in the conclusion of the plan process.  Though often considered anathema, appeals of plan confirmation orders are sometimes pursued.  Recognizing the public policy desire for finality in bankruptcy proceedings, the Eighth Circuit applies the “person-aggrieved” doctrine in determining whether an appellant has standing to appeal a plan confirmation order.  Recently, the Eighth Circuit had the opportunity to review whether a debtor – the proponent of the plan and the champion of its confirmation – can be a person aggrieved with standing to appeal its own plan.  In re: O&S Trucking, Inc., No. 15-2048 (8th Cir. Jan. 22, 2016)Background
9 hours 58 min ago
On February 3, 2016, EmKey Companies, LLC and its affiliates (collectively, “EmKey” the “Debtors”) filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division.  According to the declaration of the EmKey’s President, Worth Snyder, (the “Snyder Declaration”), the Debtors operations have been focused on the acquisition, production, exploration, and development of midstream assets and upstream oil and natural gas properties primarily within New Mexico, New York and Wyoming. The Debtors primary assets are working interests (operated and non-operated) in approximately 117 “oil and gas production sites” encompassing over 25,000 gross acres. See Synder Declaration at 6-7. The Emkey’s liabilities total approximately $14.6 million dollars in unpaid principal plus accrued interest and other fees and expenses, pursuant to a Credit Agreement with Texas Capital Bank, N.A. as Administrative Agent, secured by liens on substantially all of the Debtors assets. See Synder Declaration at 14-15 The Debtors’ bankruptcy cases are being jointly administered in the bankruptcy case captioned In re Emkey Companies, LLC, et al., Case No. 16-30548. A copy of the Synder Declaration can be accessed here: Download Snyder Declaration
10 hours 4 min ago
Orrick partner and co-head of Europe Restructuring Stephen Phillips recently joined a Debtwire panel on potential high yield restructurings in Europe and current volatile market conditions at the 12th European Distressed Debt Market Outlook. Several videos from the launch are now available on Debtwire’s site. For more information, please contact Stephen.  
10 hours 43 min ago
Filing bankruptcy is serious business.    The mere act of filing a petition creates an automatic stay effective against all entities.    Liens can be modified, taxes can be paid out and debts can be discharged.   The price of admission for getting all these benefits is full disclosure.   Unfortunately some debtors either don't understand these obligations or think they can selectively disclose only the assets they want to list.   The consequences for omitting assets can be severe as illustrated by two recent opinions from the Fifth Circuit and a press release from the Acting U.S. Attorney for the Southern District of Illinois.Judicial EstoppelJudicial estoppel is a way for courts to make lawsuits go away.   Technically, it is about preventing people from taking inconsistent positions in litigation.   However, in bankruptcy, it is a way for defendants to get out of being sued based on the plaintiff's mistakes.   Two recent cases from the Fifth Circuit illustrate the dangers of this doctrine.In Allen v. C & H Distributors, LLC, , No. 15-30330, 2015 U.S. App. LEXIS 22567 (5th Cir. 12/23/15), the debtors filed a chapter 13 petition and confirmed a plan.   One month after the plan was confirmed, one of the debtors was injured in a workplace accident.  One year later, she filed suit.  However, she did not amend her schedules to disclose either the claim or the lawsuit.
13 hours 52 min ago
Housing policy focused on government guarantees and the 30-year mortgage hasn't done much to help low- and middle-income homeowners build wealth.

Read More from: BankThink

13 hours 53 min ago
Ahead of a long weekend, companies are looking for approval from bankruptcy judges next week on a variety of motions, including one signoff that would largely conclude an old dispute. On Monday, J.P. Morgan Chase & Co. and the remnants of Lehman Brothers Holdings Inc. will ask for approval of a $1.42 billion settlement that resolves claims that J.P. Morgan illegally siphoned billions of dollars from Lehman before its collapse. The deal resolves the bulk of Lehman’s $8.6 billion lawsuit against J.P. Morgan and the bank’s counterclaims against Lehman. It also puts to rest Lehman’s challenges over J.P. Morgan’s closeout of thousands of derivatives contracts following the investment bank’s collapse. Although the settlement doesn’t resolve all the claims between Lehman and J.P. Morgan, it ends a “significant portion” of their disputes, court papers said, and allows the post-bankruptcy Lehman estate to make another $1.5 billion distribution to the investment bank’s creditors. The settlement comes after a federal judge last fall ruled for J.P. Morgan, saying the bank didn’t abuse its leverage as Lehman’s primary clearing bank to force the investment bank to hand over more collateral in the weeks before its September 2008 collapse.

Read More from: WSJ.com: Bankruptcy Beat

14 hours 23 min ago
Business owners with unpaid payroll taxes are in deep trouble. There’s no corporate shield when it comes to payroll taxes. Even if the employer is a corporation, the corporation’s management is personally liable for the trust fund portion of unpaid payroll taxes. The trust fund portion of the tax (the amount withheld from employees’ checks) can be assessed against anyone in the business who could have paid that money over to the IRS. You are in the IRS’s cross hairs, personally, if the business hands out “net” checks to employees with sending the withheld money in.  A bankruptcy discharge is no help here. What’s the payroll tax What we refer to as “payroll tax” is really a combination of two elements:  the employee’s taxes that the employer has withheld and the employer’s share of FICA  (Social Security) tax. Usually, trust funds make up about 2/3rds of the payroll tax.  The balance is the business’s matching contribution to Social Security. Trust fund liability is not dischargeable in bankruptcy.  The statute of limitations is 10 years and the IRS is a fearsome creditor. Earmark tax payments
15 hours 10 min ago
Upcoming Committee Formation Meeting:   Thursday, February 11, 2016, 10:00 a.m. Case Name:  Liquid Holdings Group, Inc., et al. Case Number:  16-10202 (KG) Location:  State Bar of Delaware 405 N. King St. Wilmington, DE 19801 The debtor’s petition is available here, and additional documents are available from the Court’s website.  The company has released a press release regarding its bankruptcy filing. Notice of Formation Meeting for Official Committee of Unsecured Creditors can be found here. Contact Norman L. Pernick, Nicholas J. Brannick, or David W. Giattino for more information.  
16 hours 5 min ago
Upcoming Committee Formation Meeting: February 11, 2016, 12:00 p.m. Case Name: Outer Harbor Terminal, LLC Case Number: 16-10283 (LSS) Location: The Sheraton Suites Wilmington Downtown, 422 Delaware Ave., Wilmington, DE 19801 Notice of Formation Meeting for Official Committee of Unsecured Creditors is available here. The petition, including the consolidated list of top 20 creditors, is provided.  A press release regarding the termination of the debtor’s operations at the Outer Harbor Terminal in Oakland is available here. Contact Norman L. Pernick, Nicholas J. Brannick, or David W. Giattino for more information.
16 hours 12 min ago
Upcoming Committee Formation Meeting: February 12, 2016, 10:00 a.m. Case Name: Ryckman Creek Resources, LLC, et al. Case Number: 16-10292 (KJC) Location: The DoubleTree Hotel, 700 King St.,Wilmington, DE 1980 Notice of Formation Meeting for Official Committee of Unsecured Creditors can be found here. The petition, including a consolidated list of top 30 creditors with the U.S. Bankruptcy Court for the District of Delaware are available from Kurtzman Carson Consultants, LLC. Contact Norman L. Pernick, Nicholas J. Brannick, or David W. Giattino for more information.  
16 hours 18 min ago
Despite their recent growth, too few marketplace lenders are reporting data to the consumer reporting agencies, which could negative repercussions on the financial system.

Read More from: BankThink

16 hours 23 min ago
Upcoming Committee Formation Meeting:  Wednesday, February 10, 2016, 10:00 a.m. Case Name: Hancock Fabrics, Inc., et al. Case Number:  16-10296 (BLS) Location: The DoubleTree Hotel, 700 King St.,Wilmington, DE 1980 The petitions (including the consolidated list of top 30 creditors), the first day declaration and the docket for the cases are available through Kurtzman Carson Consultants.  The company has issued a press release regarding its restructuring. Notice of Formation Meeting for Official Committee of Unsecured Creditors can be found here. Contact Norman L. Pernick, Nicholas J. Brannick, or David W. Giattino for more information.  
16 hours 23 min ago
Receiving Wide Coverage ... Democratic Candidates Debate: Wall Street took top billing amongst the topics of Thursday's Democratic presidential debate between remaining contenders Sen. Bernie Sanders, of Vermont, and former Secretary of State Hillary Clinton. Throughout the evening, Sanders repeatedly criticized Clinton for her connections to the financial services industry – and the way in which those connections appear to have benefited her campaign's bank account. "What being part of the establishment is, is in the...

Read More from: BankThink

16 hours 24 min ago
With the rising popularity and convenience of mobile ride hailing services such as Uber and Lyft, taxi companies are finding it difficult to keep up. Recently, Yellow Cab Cooperative in San Francisco filed for Chapter 11 bankruptcy protection. While some may see this as a sign that the traditional cab is a thing of the past, new market competition is not the only reason for the filing. Marketwatch pointed out that Yellow Cab was found liable for $8 million due to a wreck that left a passenger partially paralyzed. Yellow Cab tried to argue that the driver was an independent contractor, and therefore the company was not responsible. They were not successful with that argument and were found liable for the passenger’s injuries. This was not the only judgment against the company. Uber and Lyft both operate on an independent contractor model and, I’m sure, hope they are more successful than Yellow Cab in defending similar lawsuits that are sure to come.

Read More from: Bonds & Botes, P.C.

16 hours 31 min ago
A judge rejected a request to have a trustee oversee the bankruptcy case of KaloBios Pharmaceuticals Inc., which fired Chief Executive Martin Shkreli after he was arrested on securities-fraud charges. The Wall Street Journal has the Daily Bankruptcy Review article here. (Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit http://on.wsj.com/DJBankruptcyNews, scroll to the bottom and click “try for free.”) According to Bloomberg, sporting-goods retailer Sports Authority Inc. is getting ready to file for bankruptcy as a debt payment comes due in 10 days. Freedom Industries Inc. got a $900,000 fine for pollution charges, the Associated Press reports. The oil is rout is threatening to hurt the broad economy, WSJ reports.

Read More from: WSJ.com: Bankruptcy Beat

17 hours 5 min ago
            For this post, I attempted to find every Texas case dealing with a homestead exemption during the period between 2010 and 2015.     Many more cases interpreting the Texas constitutional and statutory laws on homesteads are decided in bankruptcy courts than in reported state court opinions.       I.                   Issues Under Texas LawThe primary Texas constitutional and statutory provisions governing homesteads are included in Appendix A.    For purposes of brevity, I have only included the provisions relevant to the cases discussed in this article.A.    What Property Can Be Claimed As a Texas Homestead?1.      Homestead AllowedWhere debtor’s leasehold interest and option to purchase were part of the same transaction, the debtor could claim a homestead interest in the option even though it was a non-possessory interest.   In re See, 2015 Bankr. LEXIS 2323 (Bankr. W.D. Tex. 2015).    However, where debtor leased property from holder of a life estate and Debtor also held remainder interest, lease was exempt but remainder interest was not.    In re Brunson, 498 B.R. 160 (Bankr. W.D. Tex.
1 day 3 hours ago
This is the fourth and final post in our series on Judge Sontchi’s postpetition interest decision in Energy Future Holdings, issued on October 30, 2015.  Our first post in this series analyzed Judge Sontchi’s ruling that postpetition interest on an unsecured claim does not constitute a part of the unsecured claim itself.  Our second post addressed the court’s use of the federal judgment rate as “the legal rate” under section 726(a)(5) of the Bankruptcy Code.  Our third post addressed the court’s ruling that, to be fair and equitable, a solvent debtor’s chapter 11 plan must provide a dissenting class of unsecured claims with an opportunity to seek postpetition interest based on equitable considerations.  In this post, we discuss the last component of the court’s ruling: that the failure of a chapter 11 to provide postpetition interest on an unsecured claim at the contra
1 day 3 hours ago
On February 2, 2016, Ryckman Creek Resources, LLC and certain of its affiliates, including Peregrine Midstream Partners, LLC (collectively, “Ryckman” or the “Debtors”) filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware in Wilmington. According to the declaration of Ryckman’s Vice President of Restructuring, Robert D. Albergotti (the “Albergotti Declaration”), Ryckman and its Prepetition Lenders are amidst negotiations to propose a plan of reorganization that results in a deleveraged balance sheet and sufficient liquidity to operate the business as a reorganized company. See Albergotti Declaration at 38. Ryckman’s business is comprised of storage of customer natural gas, proprietary trading of inventory gas, and production of liquid hydrocarbons residing in the Ryckman Creek Facility. The Ryckman Creek Facility is a partially-depleted oil and gas reservoir near the Opal Hub in Uinta County, Wyoming, which the Debtors began developing into a natural gas storage facility in 2011. See Albergotti Declaration at 8-12.
1 day 10 hours ago

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