All items from Business Finance & Restructuring News - Weil

The confluence of oil & gas law and bankruptcy law seldom results in simple, expected outcomes, and the intermingling of the two unusual areas of the law in the form of binding case law is somewhat sparse. One reason for the absence of significant appellate case law in this area is the complexity of these particular areas of the law. Indeed, one of these disciplines does not “play well” with other areas of the law and is a mixture of often convoluted nomenclature and occasionally inconsistent case law that functions to simultaneously protect and disregard contracted-for property rights through the distribution of finite resources. The other is oil & gas law.



Posted 12 weeks 1 day ago

The new value defense set forth in section 547(c)(4) of the Bankruptcy Code allows a creditor to use the value of goods and services provided by a creditor to a debtor after a debtor’s preferential payment for which the creditor has not been paid to offset preference liability.  In Friedman’s Liquidating Trust v. Roth Staffing Cos. (In re Friedman’s Inc.), the United States Court of Appeals for the Third Circuit considered an issue of first impression: does a postpetition payment to a creditor on account of such goods and services reduce the amount of the new value provided to the debtor?
Background



Posted 12 weeks 3 days ago

NORTH OF THE BORDER UPDATE
This article has been contributed to the blog by Caitlin Fell and Rebecca Wainstein. Caitlin Fell is an associate in the Insolvency & Restructuring group of Osler, Hoskin & Harcourt LLP and Rebecca Wainstein is an articling student at Osler, Hoskin & Harcourt LLP.
The Ontario Superior Court of Justice in the receivership proceedings of HSBC Bank Canada v. Mahvash Lechcier-Kimel, 2013 ONSC 7241, 2013 CarswellOnt 15938 (Ont. S.C.J.), declined to approve a proposed agreement of purchase and sale (the “Proposed Sale Agreement”) obtained by the receiver prior to the completion of an auction sale process approved by the Court on October 2, 2013. The Court held that, notwithstanding the Proposed Sale Agreement, it was necessary for the auction to proceed in order to maintain the integrity of the sale process in the receivership proceedings.



Posted 12 weeks 4 days ago

The Weil Bankruptcy Blog’s annual March Madness competition returns this year.  After we sat out the competition last year, we wanted to make sure we are shooting from the three-point line this year.  For this year’s tournament, we will be featuring brackets of the greatest, most inspiring, most shocking, most scatological, most cliché, most innovative, most out-of-context excerpts from any and all bankruptcy-related decisions.  You know, the kinds of passages that make you think, “Wow!  I have GOT to send this to all my friends.”  Based upon our review of decisions over the years, we know that a judge sometimes uses a decision to channel his or her inner [you fill in the blank – Shakespeare?  Tina Fey?  Dr. Seuss?  Mick Jagger?].  We will be presenting a short list of all these excerpts for your voting consideration, so that we can crown the “Greatest Bankruptcy Excerpt of All Time” (so to speak).
But we need your help!



Posted 13 weeks 1 day ago

Post image for Got Milk?  Apparently Not Enough for This Dairy Producer.  Court Denies Confirmation Because Plan Not Feasible.
When are projections so optimistic that a chapter 11 plan cannot be confirmed?  As the debtor in In re Friendship Dairies found out the hard way, when the projections start faltering right out of the gate.  In our continuing series on valuation issues, we examine the perils of highly optimistic projections in business plans.
Background



Posted 13 weeks 2 days ago

Thoughts From A Former Law Clerk
For many years, attorneys who were really “in the know” understood that the most frightening thing about heading to the Bankruptcy Court in lower Manhattan was not the possibility of leaving the courthouse with an unfavorable ruling for your client.  Rather, for the longest time, the most frightening thing about heading downtown was walking near Battery Park in the early afternoon and hearing a “ring ring ring” coming up from behind you.  The reason this seemingly innocuous sound was actually so terrifying was because it was the caution signal to would be pedestrians and park goers that Judge Burton R. Lifland was commencing his afternoon bike ride through Battery Park with his chambers.  And on more than one occasion you could witness a tourist or two diving for cover as the Judge and his entourage navigated their way up the West Side.



Posted 13 weeks 3 days ago

Post image for Are You There, Chief Justice Roberts?  It’s Us, the Bankruptcy Courts

Supreme Court To Hear Argument in Executive Benefits Insurance Agency v. Arkison
Doron P. Kenter and Kyle J. Ortiz
IMPORTANT UPDATE FROM THE STERN  FILES TEAM
The Supreme Court will be hearing argument today (January 14, 2014) in Executive Benefits Insurance Agency v. Arkison, in which the Court will revisit at least some of the questions that bankruptcy courts have been grappling with in the wake of the Supreme Court’s Stern v. Marshall decision.  It should be no surprise that we at the Bankruptcy Blog are tremendously interested in the outcome of this case and particularly how the Justices will respond to oral arguments.



Posted 13 weeks 4 days ago

In In re Blackwater Enterprises, Inc., the Honorable Robert A. Gordon of the United States Bankruptcy Court for the District of Maryland observed the president of the debtor company make multiple attempts to halt or delay the 363 sale of the debtor estate’s only asset.  After watching one failed card trick after another, Judge Gordon ran out of patience and directed the spotlight on the long list of motions that Mr. Rainer T. Rose had brought forth since the case was converted to chapter 7.  Noting that these motions often lacked legal foundation and that Mr. Rose consistently failed to offer evidentiary support of his position, Judge Gordon characterized Mr. Rose’s behavior as an outright refusal to progress toward solvency and found that Mr. Rose had acted in bad faith.  He dismissed the motion for stay pending appeal of the 363 sale on the basis that Mr. Rose raised no novel arguments that he could not have raised at the sale hearing, and that his arguments were, in fact, meritless.
Background



Posted 13 weeks 5 days ago

Section 362(k) of the Bankruptcy Code permits an individual injured by a third party’s willful violation of the automatic stay to recover actual and punitive damages, including attorneys’ fees, from that third party.  In In re Ampal-American Israel Corp., however, the United States Bankruptcy Court for the Southern District of New York provided a useful reminder that an individual seeking to recover damages pursuant to section 362(k) must still establish constitutional and prudential standing to assert a claim.



Posted 14 weeks 1 day ago