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In “AEREO, INC.: A CHAPTER 11 DEBTOR THAT IS NOT BROKE”, the Editorial Staff of Commercial Bankruptcy Alternatives draws upon a recent detailed article in Commercial Bankruptcy Investor on the Aereo, Inc. chapter 11 filing to illustrate the principle that a chapter 11 debtor need not be broke.
4 years 2 months ago
November 6th was the 75th anniversary of the Supreme Court's opinion in Case v Los Angeles Lumber Products, a date that I certainly did not have circled on my calendar, but which I came across in a passage on the case in an old textbook I was reading.  As many actors in the restructuring field have recently lost sight of the policy benefits of the absolute priority rule, this anniversary seems like a good occasion to look back at the case (forgive the pun) and its significance, then and now.If you ask someone today what the issue was in Case, the most likely answer will use the phrase "the new value exception to the absolute priority rule" in one way or another -- as if the case was all about an exception to the rule.  It wasn't, though.  It was actually a historically significant reaffirmation of the absolute priority rule which occurred because a really small, almost irrational bondholder played a nuisance value strategy to the hilt at a moment when the leading legal minds in Washington D.C.  were searching for a vehicle to impose greater discipline on the interminably slow, inefficient and fairly sleazy restructuring model that prevailed as a matter of practice in that era.  Also, while the New Deal era's reforms of corporate reorganization law in the wake of the Depression had been substantial, the Court had not addressed whether those laws impacted the continuing vitality of the absolute priority doct

Read More from: Necessary and Proper

4 years 2 months ago
Wall Street Journal There's no roasting marshmallows 'round the bonfire at Boost, a Bitcoin boot camp in Silicon Valley, but entrepreneurs do share bunk beds and board a bus for day-long field trips. Founded by 28-year-old Adam Draper, the son of venture capitalist and Bitcoin enthusiast Tim Draper, Boost invests between $10,000 and $20,000 in Bitcoin startups in exchange for a 6% ownership stake. ...

Read More from: BankThink

4 years 2 months ago
Posted by Kathy Bazoian Phelps    Below is a summary of the activity reported for November 2014. The reported stories reflect: 9 guilty pleas or convictions in pending cases; over 80 years of newly imposed sentences for people involved in Ponzi schemes; at least 5 newly discovered schemes involving more $100 million in the aggregate; and an average age of approximately 56 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed. And please remember that I am just relaying what’s in the news, not writing or verifying it.    William M. Apostelos and his wife, Connie M. Apostelos aka Connie Coleman, along with Scott Doak and Rebekah Fairchild, are under investigation for an alleged Ponzi scheme that may have defrauded about 213 victims out of $50 million. The scheme involved the purchase of racehorses. No one has yet been charged in connection with the alleged scheme.    Donald Ray Babb, 58, and Ralph Ruth, 61, pleaded guilty to running a Ponzi scheme. It is believed that at least 181 victims, mostly elderly, were defrauded and that the scheme raised nearly $19 million.

Read More from: The Ponzi Blog

4 years 2 months ago
On October 17, 2014, Charles M. Forman, the Chapter 7 Trustee of the Satcon Technology Corp. bankruptcy estate, filed a number of complaints seeking the avoidance and recovery of alleged preferential transfers pursuant to Sections 547 and 550 of the Bankruptcy Code.  To review a prior post concerning the filing of these complaints, click here. Since the filing of these adversary actions, the Court has scheduled a pretrial conference for January 8, 2015 at 11:00 a.m.  At the pretrial conference, the Court will enter a scheduling order to govern relevant timelines of the litigation.  For a link to a standard scheduling order that can be found on the Bankruptcy Court’s website, click here. Preference defendants should review any proposed scheduling order circulated by plaintiff’s counsel to determine to what extent the proposed order differs from the Court’s standard scheduling orders, and be prepared to object to the inclusion of any terms that materially differ. For preference defendants looking for an analysis of defenses that can be asserted in response to a preference complaint, below are several articles on this topic:
4 years 2 months ago
In a 28 page opinion released November 25, 2014 in the Tropicana Entertainment bankruptcy (Bank. D. Del. 08-10856), Judge Carey of the Delaware Bankruptcy Court provided an opinion regarding a defendant’s motion to dismiss an amended complaint.  Judge Carey granted the majority of the motion to dismiss, denying a second request for leave to amend because “The Trustee has now had ample opportunity to present a properly pled complaint.”  This ruling illustrates the importance of providing all the necessary details and required allegations in a complaint, particularly if the Court has already provided you with one “do-over”.  Judge Carey’s opinion is available here (the “Opinion”). Background
4 years 2 months ago
Looks like Mexico learned from the debt restructuring experience of Argentina...Per www.globalinsolvency.com:Thu., November 13, 2014No one expects Mexico to restructure its debt anytime soon. But if it ever does, so-called vulture investors like Mr. Singer’s Elliott Management will find it much harder to crash the debt restructuring party – as they have done so successfully in Argentina – thanks to tough new provisions written into the contracts of new bond issues for the country, the International New York Times DealBook blog reported. This week, the Mexican government made a United States securities filing for an issue of bonds that would include new, improved collective action clauses specifically written to keep holdout investors like Mr. Singer at bay. Vulture investors will be required to accumulate a much larger position in order to block a debt restructuring agreement by the majority, and the dreaded pari passu clause – which holds that all investors be treated equally – has been stripped of much of its power. Debt restructuring gurus are jumping for joy, with Anna Gelpern at Georgetown calling the foray by Mexico “the iPhone 6″ of debt restructuring contracts. Mr.

Read More from: The COMI

4 years 2 months ago
This is an article about the end of a Chapter 11 case.  As the Doors put it:
This is the end Beautiful friend This is the end My only friend, the end Of our elaborate plans, the end Of everything that stands, the end No safety or surprise, the end
All cases must come to an end.   Sometimes they linger on the docket until they smell like unwashed sweat socks stuffed behind the sofa.  Other times, the parties are eager to escape the scrutiny of the court and are looking for a creative way out.  This post focuses on how two cases reached their ends.Structured DismissalIn a recent case, Judge Harlin Hale wrote:
This case presents the issue of whether a bankruptcy court can approve a structured dismissal of a chapter 11 case, instead of conversion or forcing the parties to confirm a plan, when dismissal is what the parties want and is in the interest of creditors.
 In re Buffet Partners, L.P., et al, No. 14-30699 (Bankr. N.D. Tex. 7/23/14), p.1.    The opinion can be found here (PACER registration required).      What Happened: Buffet Partners involved the Furr's restaurant chain's second trip to the bankruptcy buffet.
4 years 2 months ago
It is with great sadness that I pass along the news that Jean Braucher passed away yesterday. Jean was my co-author, my co-blogger, and my friend. This news came suddenly this morning for all but her closest family and friends who were aware of her illness.  The official record will show that Jean was a giant among bankruptcy and contracts scholars. Her work on local legal culture in bankruptcy courts is one of the standard references on the topic. As Dov Cohen and I were trying to understand the disparities we were seeing in our data among local bankruptcy courts, we turned to Jean. She joined our research team, and her understanding of the very fine detail of how the bankruptcy courts worked in action made the project's experimental materials a success. Jean also was widely known for her work on contracts law, being one of the authors of the seminal Contracts: Law in Action textbook.

Read More from: Credit Slips

4 years 2 months ago
Recent speeches by Benjamin Lawsky and other regulators suggest that government officials are gearing up to issue new cybersecurity rules. Banks' relationships with third-party vendors are one likely area of focus.

Read More from: BankThink

4 years 2 months ago
Thanksgiving is the quintessential American holiday. Many go to great lengths to ensure that their Thanksgiving dinner table is replete with all of the traditional Thanksgiving fare: turkey, stuffing, yams covered in marshmallow, and cranberry sauce. While some folks are perfectly happy to buy a pre-made Thanksgiving meal, others must make all of their Thanksgiving fare themselves. If you are someone who likes to grow your own cranberries before serving them on your Thanksgiving table, let the Western District of Washington’s decision earlier this year in In re Kelly remind you that if the cranberries you seek to harvest are located on a debtor’s farm, your attempt to take them will be a violation of the automatic stay. Secured Creditor Is “Bogged” Down with Cranberry Woes
4 years 2 months ago
Weil partners, Joseph Smolinsky and Brian S. Rosen will be participating at the upcoming 21st Annual Distressed Investing Conference being held at the Helmsley Park Lane Hotel, New York City, on December 1st, 2014.  Mr. Smolinsky will be a moderator and Mr. Rosen will be a speaker on a panel discussing Investing in Highly Regulated Businesses. For additional information and to register for the conference, please visit http://bankrupt.com/DI2014/.
4 years 2 months ago
To answer any questions about the importance of a good credit score, you need to consider what you are trying to do. Are you thinking about applying for a major loan – such as a mortgage? If so, a high credit score is important. On the other hand, if you have a home, a car […]
4 years 2 months ago
The CFPB's proposed requirements threaten to trap next-generation digital wallets and cryptocurrency innovations in a consumer protection regime narrowly tailored to the unique characteristics of reloadable prepaid cards.

Read More from: BankThink

4 years 2 months ago
Receiving Wide Coverage ... HSBC in Regulators' Crosshairs: Loose lips sink ships, as American propaganda posters during World War II once proclaimed, but it seems some bank employees are unaware of the idiom. The Wall Street Journal reports the Justice Department has launched a probe into allegations that an HSBC trader alerted a major hedge fund to confidential details about an imminent currency exchange deal in 2010. The probe "suggests that the U.S. is eyeing a...

Read More from: BankThink

4 years 2 months ago
Weil partner, Debra Dandeneau will be the moderator at an upcoming ABA webinar, Pursuing and Defending Alleged Fraudulent Transfers, taking place Wednesday, December 10, 2014 at 1:00 p.m. ET. Topics covered will include: litigating fraudulent transfer/conveyance actions, the legal and financial challenges in identifying, proving, and ultimately unwinding fraudulent transfers, and the interplay between counsel and an expert witness in the analysis and litigation of fraudulent transfers. Visit the ABA website for additional information and to register.
4 years 3 months ago
Should a membership agreement governing a debtor’s interest in an LLC be treated as property of the estate or an executory contract? Equally, should a debtor’s economic and non-economic interests in an LLC be treated as property or a contractual right? Can’t make up your mind? Don’t worry—the bankruptcy courts can’t either.
4 years 3 months ago
Here at Shenwick & Associates, many of our personal bankruptcy clients have issues with tax debts that they're looking for our guidance on. The issue of taxes in bankruptcy is a complex one that we've covered in a prior post.However, there are many circumstances in which taxes are not dischargeable in bankruptcy, including taxes that were recently assessed or for which a tax return was recently filed. One alternative for debtors who are looking to either reduce or pay their tax debts that aren't dischargeable in bankruptcy is an offer in compromise (OIC). OICs are available to both individuals and businesses.In evaluating an OIC, the IRS will consider several factors, including: 
  • Ability to pay;
  • Income;
  • Expenses; and
  • Asset equity.
Preparation of an OIC package requires a detailed listing of the debtor's income, expenses and assets.

Read More from: Shenwick & Associates

4 years 3 months ago