All items from Business Finance & Restructuring News - Weil

Steve McCroskey: Jacobs, I want to know absolutely everything that’s happened up ‘til now.
Jacobs: Well, let’s see. First the earth cooled. And then the dinosaurs came, but they got too big and fat, so they all died and they turned into oil. . . .
-Airplane II: the Sequel
One of the hallmarks of bankruptcy is that it provides a fair and open forum for the resolution of claims against the debtor. Another primary goal of the corporate bankruptcy process is to create an efficient and meaningful process for resolving claims and either (i) reorganizing the debtor as a going concern or (ii) fairly distributing the debtor’s assets in accordance with the statutory order of priority. But what happens when these two goals conflict?
Sticky situations can often arise when the bankruptcy process involves proceedings that are kept under seal, behind closed doors, or for certain parties’ eyes only. Disputes are often resolved in back room deals. Confidential information may be useful for certain parties’ decision-making but may be harmful if released to the public, and parties may be more forthcoming and productive in chambers conferences with the presiding judge and with key players in the case. But balancing these considerations against the overarching goal of transparency and due process can be quite tricky. We’ve previously written about similar sticky situations.

Posted 19 hours 24 min ago

Canons of statutory construction are used frequently to resolve ambiguities in the Bankruptcy Code. In a recent decision arising out of the Madoff liquidation, Judge Rakoff of the Southern District of New York had to implement more than a few to creatively resolve a potential conflict between the Bankruptcy Code and the Securities Investor Protection Act (SIPA). He also had to take a practical, yet expansive, view of what the word “prompt” can mean when managing the untangling of one of the largest financial frauds in American history.
The Facts

Posted 1 day 19 hours ago

Creditors contemplating the bold step of commencing an involuntary bankruptcy case against a putative debtor may wish to consider a recent decision of the Bankruptcy Court for the District of Minnesota Court, In re American Resource & Energy, LLC, where the court dismissed an involuntary chapter 7 petition by summary judgment motion after determining that (a) each of the three petitioning creditors failed to qualify under section 303(b)(1) of the Bankruptcy Code to file a bankruptcy petition as a “bona fide dispute” existed with respect to each of their putative claims when they filed the petition that commenced the case and (b) with the disqualification of those parties as petitioners, the joinder of a fourth creditor to the petition post-filing did not satisfy the debt threshold of section 303(b)(2) to allow that party to maintain the petition even if the putative debtor had fewer than twelve creditors in all. For want of a qualified petitioning creditor holding claims in a sufficient amount against the putative debtor, the petition, and the case as a whole, was dismissed.

Posted 2 days 17 hours ago

Discounted cash flow analysis is a mainstay among the valuation methodologies used by restructuring professionals and bankruptcy courts to determine the enterprise value of a distressed business. Despite its prevalence, the United States Bankruptcy Court for the Southern District of New York recently concluded the DCF method was inappropriate for the valuation of “dry bulk” shipping companies. In re Genco Shipping & Trading Limited. Although the bankruptcy court merely applied existing law to the facts of the case, the decision in Genco could serve as precedent for the valuation of companies in other segments of the shipping industry, or other industries, that experience significant volatility in rates.
Genco and the Prepackaged Plan of Reorganization
Genco Shipping & Trading Limited is a leading provider of maritime transportation services for “dry bulk” cargoes, such as iron ore, coal, grain, and steel products. Through its subsidiaries, Genco owns and operates a fleet of 53 vessels, which it contracts out to third-parties under fixed-rate or spot-market time charters.

Posted 6 days 18 hours ago

As a result of the sheer number of legal and factual issues involved in many chapter 11 cases, bankruptcy judges can sometimes find themselves as captives of the parties; they may not appreciate the significance of an issue or a provision buried in a longer document unless it is properly presented. Thus, it is imperative that counsel flag the key issues for the court. Failure to do so risks severe consequences for parties in interest, as exemplified by In re Lower Bucks Hospital.

Posted 1 week 19 hours ago

Weil Partner, Gary Holtzer, will be participating on a panel at the upcoming Views from the Bench conference to be held on Friday, October 24th, at the Georgetown University Law Center, in Washington, D.C.
For additional information on the event, please visit

Posted 1 week 1 day ago

Weil Partner, Harvey Miller, will participate on a panel to discuss: Merchants of Venice: The Ethics of Debt Insolvency at the upcoming National Conference of Jewish Lawyers, being held at the Palmer House Hilton, 17 East Monroe Street, Chicago, Illinois on Wednesday, August 6, 2014.
For additional information on the conference and schedule, please visit

Posted 1 week 1 day ago

One topic we regularly write about on the Bankruptcy Blog is releases – especially third-party releases. In fact, as recently as Thursday, we wrote about third-party releases. The topic of third-party releases is often controversial, and circuits disagree about the extent to which they are permissible, if at all. In a recent memorandum opinion confirming the chapter 11 plan of drybulk shipper Genco Shipping and its debtor affiliates, the Honorable Sean Lane of the United States Bankruptcy Court for the Southern District of New York in In re Genco Shipping & Trading Limited, et. al. waded into the controversy by considering the appropriateness of third-party releases – and non-consensual ones at that.

Posted 1 week 1 day ago

This article has been contributed to the blog by Patrick Riesterer. Patrick Riesterer is an associate in the insolvency and restructuring group of Osler, Hoskin & Harcourt LLP.
We recently reported on the public consultation process on insolvency law reform initiated by Industry Canada, the Canadian federal department responsible for the principal Canadian insolvency law statutes, the Companies’ Creditors Arrangement Act (“CCAA”) and the Bankruptcy and Insolvency Act (“BIA”). Industry Canada published a discussion paper and sought public submissions on a number of topics relating to insolvency law reform. The period for public comment has now closed and a number of submissions by professionals and members of the public have been published on Industry Canada’s website. The comments can be found here

Posted 1 week 2 days ago