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This is the next post in Plan Proponent’s series on the confirmation-related recommendations in the ABI Commission Report (and, in particular, its Exiting the Case piece). In this post, we’ll cover the Commission’s recommendations regarding post-confirmation entities and claims trading. The Commission addresses post-confirmation entities and claims trading in the context of disclosure. As a starting point, Section 1125 of the Bankruptcy Code requires a plan proponent to file a disclosure statement that contains “adequate information.” Section 1125(a) contains a rather exhaustive list of what constitutes adequate information. Additionally, courts tend to rely on 8 factors or so to assess the adequacy of a disclosure statement. As the Commission points out, the gist of Section 1125 (and such factors) is whether the “disclosure statement identifies and explains material aspects of the debtor’s business, chapter 11 case, and proposed plan so that creditors and other stakeholders can make an informed decision about voting on the plan.” Post-Confirmation Entities

Read More from: Plan Proponent

5 years 3 months ago
It’s nothing new in 2015 to say that social media has become a valuable part of any company’s marketing and public relations strategy.  Companies now rely on sites like Facebook and Twitter to communicate with customers, advertise products, build brands, and shape public opinion.   Despite the obvious value such accounts provide, however, it is not always clear what rights, if any, a company may have in a social media account associated with its businesses or brands.  The Twitter account of Richard Branson, the billionaire founder of Virgin Group, provides a useful example of this dilemma.  Mr. Branson frequently uses a Twitter account bearing his name to promote Virgin Group’s various businesses and often shares hyperlinks to pages on Virgin’s official website.  With over 5 million followers, Mr. Branson’s Twitter account undoubtedly represents a lucrative marketing tool for Virgin Group.  But who “owns” the account, Virgin Group or Mr. Branson?  Does Virgin Group have a protectable property interest in the account? If Mr. Branson and Virgin Group were ever to part ways (an admittedly unlikely proposition), would Mr. Branson or Virgin Group retain the right to continue “tweeting” to those 5 million potential customers?
5 years 3 months ago
Davis Polk has submitted a comment letter on the SEC proposal  for companies to disclose their equity hedging policies.
5 years 3 months ago
If banks consider licensed and regularly supervised pawnbrokers with many compliance responsibilities to be too risky to bank, then what Main Street businesses are safe?

Read More from: BankThink

5 years 3 months ago
Sven, of St. Paul, related to us this sad but musical tale, which pertains to purchasing real estate where the seller goes bankrupt before closing. You see, she and I entered into a written contract to buy a piece of land with a small house on it — all of which she owned free and clear — near St. Paul for $500,000. I had already paid one-half of the purchase price, and besides paid recent water and electric bills (to be settled separately at closing), and was ready to pay the rest of the purchase price at closing. Read more here.
5 years 3 months ago
U.S. tax law encourages energy companies focused on exploration and production of oil, gas, and minerals to form as master limited partnerships.  That raises certain tax issues for investors in troubled debt of troubled energy companies. A group of lawyers from Kaye Scholer discuss related issues at length in a white paper entitled, “The Price of Oil & the Potential for Master Limited Partnership Restructuring and Insolvencies,” which was published on the firm’s website, and which we recommend. Read more here.
5 years 3 months ago
Consumers should receive the same level of protection whether they choose to do business with a bank or with marketplace lenders and other challengers.

Read More from: BankThink

5 years 3 months ago
Tim Blixseth was ordered to jail for contempt until he accounts for million he owes creditors. In this April 29, 2009, file photo, Tim Blixseth arrives at the federal courthouse in Missoula, Mont.
Michael Albans/Associated Press
A federal judge Monday ordered former billionaire real-estate developer Tim Blixseth jailed for contempt until he accounts for millions of dollars he owes creditors. 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, creditors of Energy Future Holdings Corp. are looking for an extra $431 million bankruptcy payment.

Read More from: WSJ.com: Bankruptcy Beat

5 years 3 months ago
Tim Blixseth was ordered to jail for contempt until he accounts for million he owes creditors. In this April 29, 2009, file photo, Tim Blixseth arrives at the federal courthouse in Missoula, Mont.
Michael Albans/Associated Press
A federal judge Monday ordered former billionaire real-estate developer Tim Blixseth jailed for contempt until he accounts for millions of dollars he owes creditors. 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, creditors of Energy Future Holdings Corp. are looking for an extra $431 million bankruptcy payment.

Read More from: WSJ.com: Bankruptcy Beat

5 years 3 months ago
Breaking News This Morning ... Earnings: Fifth Third, Synovus Receiving Wide Coverage ... Bank Tax Backfire? British banks HSBC and Standard Chartered are considering fleeing the land of tea and crumpets for Asia in order to avoid the U.K.'s steep bank taxes. The discussion comes at the behest of shareholders rattled by Britain's decision last month to increase the bank tax by a third. (The tax has been hiked eight times since it was implemented in 2010, according...

Read More from: BankThink

5 years 3 months ago
On April 19, 2015, Frederick’s of Hollywood, Inc., and its affiliated companies (the “Debtors” or “Frederick’s”) filed chapter 11 bankruptcy petitions in the United States Bankruptcy Court for the District of Delaware.  At the time of the bankruptcy filing, the Debtors held assets in the amount of $36.5 million, and debts in the amount of $106 million. According to the Declaration of William Soncini, the Chief Operating Officer of the Debtors, Frederick’s sells high quality women’s apparel and related products under their proprietary Frederick’s of Hollywood brand. Decl. ¶ 8.  The Debtors’ major merchandise categories are foundations, lingerie, ready-to-wear, and accessories (including shoes, handbags, jewelry, personal care products, and novelties).  Id.  The Debtors’ target consumer base is women aged 18-45, and their exclusive product offerings and collections include Seduction by Frederick’s of Hollywood and the Hollywood Exxtreme Cleavage® bra.  Id. According to the Soncini Declaration, the Debtors have commenced these chapter 11 cases to effectuate a sale of substantially all of their assets to a stalking horse purchaser, subject to higher or better offers received in connection with the proposed sale process.  Decl. ¶ 47.
5 years 3 months ago
The recent IPO success of Uber, Facebook, Airbnb and others, have many investors interested in getting an ownership stake prior to the IPO offering.  Prior? Yes, prior.  In days past, getting in on a “hot IPO” was something some investors would seek to do as a risky yet potentially rewarding strategy.  Today, however, more and more investors are seeking to “get in” earlier. Read more here.
5 years 3 months ago
I just received an e-mail from a gentleman who filed a chapter 13, but later decided to dismiss his case.  He is wondering if the Bankruptcy Court can instruct the credit reporting agency to remove the bankruptcy from his credit report.  Unfortunately, the answer is no.  A bankruptcy will stay on the debtor’s credit report for ten years, even if the case is later dismissed. I don’t know if this result would have made a difference for this gentleman, but at least he should have been told the result. Follow The StepsTo schedule your Free Bankruptcy Consultation with Diane The post Bankruptcy Stays on your credit report even if case dismissed appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
5 years 3 months ago
Chapter 11's ability to empower true reorganization has received much criticism of late in light of an increasingly held assumption that most Chapter 11 cases end in a 363 sale of the debtor's assets. Around this time last year, the American Bankruptcy Institute and the University of Illinois College of Law co-hosted a symposium dedicated to discussing secured creditors’ rights and role in modern Chapter 11. Papers from the symposium (including by Slips contributors) very recently became available here. I was lucky enough to moderate a couple of the symposium panels. As I was listening to the discussion, I noticed that what I was hearing about secured creditors and 363 sales did not match  what I had observed in my study of how religious organizations (mainly smaller churches) currently use Chapter 11. To accompany the release of the symposium papers, I wrote a short piece describing how secured creditors influenced religious organizations' Chapter 11 cases in ways that did not lead to widespread sales, but rather, plans and settlements.

Read More from: Credit Slips

5 years 3 months ago
Is a rent-stabilized lease in New York a “local public assistance benefit” that is exempt from property of a debtor’s bankruptcy estate, or is it merely “a quirk of the regulatory scheme in the New York housing market[?]”  That was the question recently decided by the Second Circuit in In re Monteverde.   As we have covered on this blog in the past, here, and here, section 522 of the Bankruptcy Code recognizes certain types of property as “exempt” from the bankruptcy estate.  Among the listed exemptions is section 522(b)(3), which exempts property that is exempt under Federal, State or local law.  In turn, section 282(2) of New York Debtor and Creditor Law creates an exemption for a debtor’s interest in “a local public assistance benefit.” Facts
5 years 3 months ago
Ceres, on behalf of institutional investors representing nearly $2 trillion in assets under management, sent a letter to the SEC on April 17, 2015, requesting that the agency scrutinize the lack of “carbon asset risk” disclosure in oil and gas company filings. The letter defines “carbon asset risk” broadly to include risks associated with capital expenditures on high cost/carbon intensive oil and gas exploration projects, government efforts to limit carbon emissions and the possibility of reduced global demand for oil as early as 2020. Ceres claims that carbon asset risks are material “known trends” requiring disclosure under SEC rules. The New York State Office of the State Comptroller and the New York City Office of the Comptroller simultaneously sent a letter to the SEC in support of Ceres’ request.
5 years 3 months ago
Over at Dealb%k, I have a new column up about Colt's rather aggressive dual-track exchange offer and prepack. In short, it involves very little creditor input. Perhaps part of a larger trend of aggressive use of chapter 11 by private equity backed debtors? And no, I have no idea if Robert Culp is holding a Colt firearm that that picture ... but he looks kind of cool, doesn't he?

Read More from: Credit Slips

5 years 3 months ago
On April 19, 2015, Frederick’s of Hollywood, Inc., a well-known retailer of women’s lingerie, filed for chapter 11 protection in the United States Bankruptcy Court for the District of Delaware.  In addition to the petition filed by Frederick’s, petitions were filed by five other related entities.  The cases have been assigned to The Honorable Kevin Gross, and are docketed as case no. 15-10836. William Soncini, the Chief Operating Officer for each of the debtors since July 2014, has filed a declaration in support of the various petitions.  According to the Soncini declaration, the Debtors sell high quality women’s apparel and related products under their proprietary Frederick’s of Hollywood® brand.  According to Mr. Soncini, the debtors previously went through a bankruptcy filing between 2000 and 2003.  Recently, “in the face of growing liquidity issues and concerns about their ability to continue operating as a publicly listed company and a going concern, the Debtors were taken private by a consortium consisting of HGI Funding, LLC . . . , Tokarz Investments, LLC, TTG Apparel, LLC, Arsenal group, LLC, Fursa Alternatives Strategies LLC and William F. Harley, III, . . . , for an aggregate transaction value of approximately $24.8 million.”
5 years 3 months ago
More and more legal businesses are finding themselves shut out of the banking system. But there are a number of possible solutions-including passing a law that would require banks to maintain accounts for businesses able to meet some standard of due diligence.

Read More from: BankThink

5 years 3 months ago
Members of the US Armed Forces have just as much right to file for bankruptcy protection as civilians. In fact, while one or both spouses are away from home serving their country, it’s not unusual for bills to pile up. Recent economic conditions have made it difficult to make ends meet and being away for long periods of time means there is less of an opportunity to get a second or third job to pay down debt. While there are no restrictions on whether or not military members can file for bankruptcy, there are a few things to keep in mind. If you are planning a career in the military, or have your hopes set on working your way up the ranks, be aware that some of the higher ranks require security clearances. A bankruptcy on your record could squash your chances of being approved for those clearances. In fact, you may not get far in the process of promotion once you are forced to reveal that you’ve had an account delinquent by more than 180 days. Also, if you have had your wages garnished or any judgments against you, getting the high ranking security clearances will be extremely difficult, if not impossible.
5 years 3 months ago