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Receiving Wide Coverage ... HSBC Under Fire: HSBC's Swiss unit colluded with wealthy clients including "international criminals" to help them avoid paying millions of dollars in taxes, according to what The Guardian calls "the biggest bank leak in history." The Swiss private bank routinely handed untraceable bricks of cash over to clients and conspired with clients to hide undeclared accounts from tax authorities, according to files from the period between 2005 and 2007 that were obtained...

Read More from: BankThink

4 years 6 months ago
In an unsurprising move, RadioShack has become the latest retailer to file for relief under Chapter 11 of the Bankruptcy Code.  RadioShack filed on February 5, 2015 along with 17 of its affiliates.  The cases are jointly administered under Case Number 15-10197 and presided over by Judge Shannon.  The emergency first day motion was held on February 6, 2015, and a further first day hearing will occur at 9:30 on February 9, 2015. Pursuant to the Declaration of Carlin Adrianopoli in Support of First Day Pleadings (D.I. 17) (the “Declaration”), RadioShack has over 21,000 employees, 4,400 stores, and 100 million shares of stock.  The goal of this bankruptcy is to “promptly reduce costs by closing up to 2,100 underperforming stores”.  Declaration at *7.  As a part of my practice is the defense of preference actions, I couldn’t help but notice that the Declaration contains a statement that “merchandise vendors reduced or declined to extend trade credit and/or offered less favorable payment terms.”  Declaration at *13.  One of the strongest defenses in a preference action is the “Ordinary Course” defense.  As its name implies, the payment recipient must have acted in the ordinary course of the parties dealings.  If you’d like to know more about how this, or any other, defense may apply to your situation, feel free to contact us.
4 years 6 months ago
Altegrity, Inc., who bills itself on its website as “The world’s leading brands in risk solutions, security, ediscovery, data recovery and employment screening,” filed for chapter 11 protection in Delaware on February 8, 2015.  It was joined by 37 of its affiliates.  The bankruptcy case is docketed as case no. 15-10226, and has been assigned to the Honorable Laurie Selber Silverstein. A copy of the petition is here.  According to the Declaration of Jeffrey Campbell, President and CFO, Altegrity and its debtor and non-debtor subsidiaries makes up “a privately held global, diversified risk and information services company serving commercial customers and government entities.”  Together, they employ 3300 employees.  According to Mr. Campbell, for the last 12 months ending June 30, 2014, the Company generated approximately $1.4 billion in revenue on a consolidated basis.  As of that time, the debtors had approximately $1.7 billion in assets and $2.1 billion in liabilities on a consolidated basis.
4 years 6 months ago
Section 365(d) of the Bankruptcy Code requires the debtor-tenant to satisfy all the terms under the lease during the post petition period until the tenant either rejects the lease, or assumes and assigns it to a third-party.  The landlord’s claim for unpaid rent receives “administrative claim” status, which is a higher priority of claim than many of the other claims against the debtor.  Creditors holding an administrative claim against the debtor will receive payment on their claims before “unsecured creditors,” to the extent funds are available. Should the debtor-tenant fail to pay the rent as provided under the lease, the landlord should file a motion for payment of post-petition rent with the bankruptcy court and/or a motion for relief from automatic stay.  The rent motion in some instances can be heard within thirty to sixty days from the date in which it was filed.  However, if an evidentiary hearing is needed to resolve issues pertaining to the administrative rent claim,  the motion could require several months before the court issues a decision. Instead of seeking payment of rent, landlords may file a motion for relief from the automatic stay.  With this alternative, the landlord seeks an order from the court allowing the landlord to enforce its rights under the lease due to the tenant’s breach (such as evicting the defaulting tenant).
4 years 6 months ago
It’s an old saying that lessons are expensive and good lessons are really expensive.  A recent 2nd Circuit Case provides a good lesson on attention to detail and, unfortunately, it is also a really expensive lesson to JPMorgan and their attorneys.  In the 2nd Circuit’s recent opinion, the Court determined that a UCC3 (termination statement) which “accidently” was filed served to unsecure a $1.5 billion (“BB”) loan which could not be re-secured because of GM’s bankruptcy filing. A Quick Background By now you have likely heard about the recent opinion out of the GM bankruptcy case (which is now called “Motors Liquidation”) regarding JPMorgan Chase Bank.  However, I will briefly recap for those of you who have not received the emails circulating around. Before I get into the case, it is helpful to be familiar with two legal concepts.  They are the bankruptcy code’s strong arm provisions and perfection and termination of a personal property lien.

Read More from: Tough Times for Lenders

4 years 6 months ago
As Melissa has noted, the district court has ruled that Puerto Rico's Recovery Act is preempted by the Bankruptcy Code, among other things. I want to amplify one point that she made in her post. The court's preemption analysis is exceeding week. In particular, the court never grapples with the 10th Amendment implications of its decision, despite holding that no state can address municipal insolvency, even those jurisdictions that do not allow their municipalities to file under chapter 9. Treating the 10th Amendment as a dead letter seems like something that is about two Chief Justices too late.

Read More from: Credit Slips

4 years 6 months ago
Last summer, PREPA bondholders filed actions challenging the constitutionality of Puerto Rico's recently enacted, but as yet unused, Public Corporation Debt Enforcement and Recovery Act. Last night, the district court filed a seventy-five page opinion. It did not dispose of the actions in full (e.g., the contract clause challenges remain alive but not decided), but did hold the Recovery Act is preempted. Given that the judge's order permanently enjoins Puerto Rico from enforcing the Recovery Act, I believe it is immediately appealable under 28 USC 1292(a)(1).

Read More from: Credit Slips

4 years 6 months ago
Burtch v. Avnet, Inc., No. 13-060-LPS, 2015 WL 24318  (D. Del. Jan. 16, 2015) This District Court Memorandum Order offers a cautionary tale to practitioners as to the proper—and often improper—use of certifications of counsel. Read More › Tags: 9019 Settlements, Certification of Counsel, Practice Points

Read More from: Delaware Bankruptcy Insider

4 years 6 months ago
Burtch v. Avnet, Inc., No. 13-060-LPS, 2015 WL 24318  (D. Del. Jan. 16, 2015) This District Court Memorandum Order offers a cautionary tale to practitioners as to the proper—and often improper—use of certifications of counsel. Read More › Tags: 9019 Settlements, Certification of Counsel, Practice Points

Read More from: Delaware Bankruptcy Insider

4 years 6 months ago
A recap of the informed opinions (and the discussions they generated) on BankThink this week.

Read More from: BankThink

4 years 6 months ago
The Chamber of Commerce has sent a letter to SEC Chair White to “express significant concern” regarding the announcement that the SEC staff will express no views on the application of Rule 14a-8(i)(9) during the season, which we previously discussed here.
4 years 6 months ago
Bankruptcy lawyers are often hired for the task of shutting down an unsalvageable business.  Earlier this week, Louisiana lawyer Martin A. Schott was hired to resurrect a dead one. With a bankruptcy judge’s order, Mr. Schott is now in charge of shuttered oil and gas driller EC Offshore Properties Inc., which halted operations off the Louisiana coast in August. That closure began a countdown on a very important timer: under federal rules, a company that stops drilling on leased land will lose that lease after 180 days of inactivity. For EC Offshore, that countdown ends on Feb. 16, according to unpaid contractors who filed an involuntary Chapter 11 bankruptcy case against EC Offshore and quickly made their plea in court papers for the appointment of someone like Mr. Schott who can “step into the [company’s] shoes.” If the company’s lease expires, it’s less likely that the unpaid contractors—owed nearly $150,000—will be paid, their lawyers said in documents filed in U.S. Bankruptcy Court in Lafayette, La. EC Offshore officials didn’t respond the contractor’s request in court papers. EC Offshore’s Chief Executive John Boylan did not return a request for comment left at his office. Mr. Schott also couldn’t be reached to talk about whether his assignment is even possible. Using bankruptcy to bring a dead company back to life? It’s rare, but it does happen.

Read More from: WSJ.com: Bankruptcy Beat

4 years 6 months ago
Bankruptcy lawyers are often hired for the task of shutting down an unsalvageable business.  Earlier this week, Louisiana lawyer Martin A. Schott was hired to resurrect a dead one. With a bankruptcy judge’s order, Mr. Schott is now in charge of shuttered oil and gas driller EC Offshore Properties Inc., which halted operations off the Louisiana coast in August. That closure began a countdown on a very important timer: under federal rules, a company that stops drilling on leased land will lose that lease after 180 days of inactivity. For EC Offshore, that countdown ends on Feb. 16, according to unpaid contractors who filed an involuntary Chapter 11 bankruptcy case against EC Offshore and quickly made their plea in court papers for the appointment of someone like Mr. Schott who can “step into the [company’s] shoes.” If the company’s lease expires, it’s less likely that the unpaid contractors—owed nearly $150,000—will be paid, their lawyers said in documents filed in U.S. Bankruptcy Court in Lafayette, La. EC Offshore officials didn’t respond the contractor’s request in court papers. EC Offshore’s Chief Executive John Boylan did not return a request for comment left at his office. Mr. Schott also couldn’t be reached to talk about whether his assignment is even possible. Using bankruptcy to bring a dead company back to life? It’s rare, but it does happen.

Read More from: WSJ.com: Bankruptcy Beat

4 years 6 months ago
Bankruptcy lawyers are often hired for the task of shutting down an unsalvageable business.  Earlier this week, Louisiana lawyer Martin A. Schott was hired to resurrect a dead one. With a bankruptcy judge’s order, Mr. Schott is now in charge of shuttered oil and gas driller EC Offshore Properties Inc., which halted operations off the Louisiana coast in August. That closure began a countdown on a very important timer: under federal rules, a company that stops drilling on leased land will lose that lease after 180 days of inactivity. For EC Offshore, that countdown ends on Feb. 16, according to unpaid contractors who filed an involuntary Chapter 11 bankruptcy case against EC Offshore and quickly made their plea in court papers for the appointment of someone like Mr. Schott who can “step into the [company’s] shoes.” If the company’s lease expires, it’s less likely that the unpaid contractors—owed nearly $150,000—will be paid, their lawyers said in documents filed in U.S. Bankruptcy Court in Lafayette, La. EC Offshore officials didn’t respond the contractor’s request in court papers. EC Offshore’s Chief Executive John Boylan did not return a request for comment left at his office. Mr. Schott also couldn’t be reached to talk about whether his assignment is even possible. Using bankruptcy to bring a dead company back to life? It’s rare, but it does happen.

Read More from: WSJ.com: Bankruptcy Beat

4 years 6 months ago
The mergers and acquisitions surge witnessed at the end of 2013 continued through 2014 and drove overall global mergers and acquisitions activity to 2007 pre-recession levels. By many accounts it was been a banner year for mergers and acquisitions. The virtually continuous deal flow was a driving force in creating a very robust volume of loan issuance, and a significant portion of 2014’s acquisition financing was backed by leveraged loans and high yield issuance.
4 years 6 months ago
Energy Future Holdings Corp. heads to bankruptcy court Tuesday in Wilmington, Del., to defend its right to hang on to exclusive control of its $42 billion bankruptcy until June 23. The company originally wanted to ward off competing reorganization plans until Oct. 29 but chopped some four months out of its exclusive control period after its request for an extension triggered an open clash among major creditor groups. Top creditors of Energy Future’s largest division, Texas Competitive Electric, are threatening to tear the big Dallas energy company in two in a way that could touch off $6 billion in tax liabilities. Junior creditors of the parent company say the senior Texas Competitive creditors are bluffing and that only a tax-free reorganization will pass muster. Energy Future’s bankruptcy proceeding began in April 2014 after months of negotiations with senior Texas Competitive Electric creditors, a group that includes Apollo Global Management , Oaktree Capital Management and other big distressed-debt investors. The company is still pushing toward the goal of a tax-free division of its two major collections of businesses.

Read More from: WSJ.com: Bankruptcy Beat

4 years 6 months ago
Energy Future Holdings Corp. heads to bankruptcy court Tuesday in Wilmington, Del., to defend its right to hang on to exclusive control of its $42 billion bankruptcy until June 23. The company originally wanted to ward off competing reorganization plans until Oct. 29 but chopped some four months out of its exclusive control period after its request for an extension triggered an open clash among major creditor groups. Top creditors of Energy Future’s largest division, Texas Competitive Electric, are threatening to tear the big Dallas energy company in two in a way that could touch off $6 billion in tax liabilities. Junior creditors of the parent company say the senior Texas Competitive creditors are bluffing and that only a tax-free reorganization will pass muster. Energy Future’s bankruptcy proceeding began in April 2014 after months of negotiations with senior Texas Competitive Electric creditors, a group that includes Apollo Global Management , Oaktree Capital Management and other big distressed-debt investors. The company is still pushing toward the goal of a tax-free division of its two major collections of businesses.

Read More from: WSJ.com: Bankruptcy Beat

4 years 6 months ago
Energy Future Holdings Corp. heads to bankruptcy court Tuesday in Wilmington, Del., to defend its right to hang on to exclusive control of its $42 billion bankruptcy until June 23. The company originally wanted to ward off competing reorganization plans until Oct. 29 but chopped some four months out of its exclusive control period after its request for an extension triggered an open clash among major creditor groups. Top creditors of Energy Future’s largest division, Texas Competitive Electric, are threatening to tear the big Dallas energy company in two in a way that could touch off $6 billion in tax liabilities. Junior creditors of the parent company say the senior Texas Competitive creditors are bluffing and that only a tax-free reorganization will pass muster. Energy Future’s bankruptcy proceeding began in April 2014 after months of negotiations with senior Texas Competitive Electric creditors, a group that includes Apollo Global Management , Oaktree Capital Management and other big distressed-debt investors. The company is still pushing toward the goal of a tax-free division of its two major collections of businesses.

Read More from: WSJ.com: Bankruptcy Beat

4 years 6 months ago
The Editorial Staff at www.CommercialBankruptcyLitigation.com discusses the Delaware Bankruptcy Court’s decision to allow Caesar’s bankruptcy case to proceed in Chicago. Learn more about the decision here!
4 years 6 months ago
In a Breaking News Alert  at CommercialBankruptcyInvestor.com, Chapter11Dockets.com discusses a rare event for a publicly traded company that goes through Chapter 11 process.  Read more about W.R. Grace and why its stock is up 12% here!
4 years 6 months ago