On September 20, 2023, the U.S. Bankruptcy Court for the Central District of California confirmed an unusual plan for a bankruptcy. A cannabis-related business, referred to as the “Debtor,” was given permission to sell its equity interests in a Canadian cannabis company. Named Lowell Farms, the distribution of the company’s proceeds will now be targeted…
After a notable rise of corporate Chapter 11 filings last spring, comparable to the numbers seen during the Great Recession, recent reports suggest that bankruptcy practices are on pace for a stronger year than that of 2021 or 2022. That said, if the current trends continue, the number of large corporate bankruptcies this year could…
In a critical case, Kenneth M. Krys as Liquidator of Fairfield Sentry Limited (in liquidation) v Farnum Place BVIHCVAP2013/0014, important perspectives on ‘final decisions’ during ongoing liquidation applications have been shared by the Court of Appeal. This case provides crucial insight for legal professionals dealing with similar circumstances, allowing practitioners to understand the thresholds for…
Law firms representing the Boy Scouts of America and other involved parties in the organization’s Chapter 11 case have defended their request for payment of $148.3 million in professional fees. These defenses were made last Thursday in Delaware. The firms argue that the tasks under scrutiny by the Office of the U.S. Trustee were within…
Recent legal developments in the United States Bankruptcy Court jurisdiction have brought forward fascinating insights about the intersection of constitutional law and bankruptcy law. In a rather interesting decision, the Fourth Circuit Court of Appeals held that the mootness of a claim does not bar a bankruptcy court’s jurisdiction. This issue revolves around Title 11…
U.S. Bankruptcy Judge Cecelia Morris, recognized for her role in presiding over high-profile cases such as the Bernie Madoff Ponzi scheme scandal and a groundbreaking bankruptcy petition by a same-sex couple, is set to retire on January 31, 2024. The announcement comes after an impressive tenure of over 20 years, setting a benchmark for her…
Virage Capital Management, a Houston-based litigation funder, seems to have a distinct taste for risk. A close look at its operations since its inception in 2013 reveals that its funding activities are intricately linked to a series of high-profile law firm implosions. On no less than four occasions, it has found its lending involved in…
The landscape of merger and acquisition (M&A) strategies has always been complex, and when union contracts and Section 363 Sales intersect, the complexity intensifies even further. This article serves as an update in light of the recent legal developments and their implications for corporations navigating through these intricate waters. In the context of distressed acquisitions,…
High profile media personality, Alex Jones, has placed his parent company into bankruptcy to avoid paying pending damages. A dispute has arisen with the company over unpaid salary, with Jones claiming $1.3 million while also seeking bankruptcy protection himself. The company has argued that the ongoing bankruptcy proceedings prevent it from fulfilling his demands. Read…
In a shift from the gradual decrease observed since the outset of 2021, a significant rise in the number of large corporate bankruptcy filings has been reported for the first half of 2023. A recent report by Cornerstone Research reveals that this sudden surge is primarily originating from companies within the retail trade, services, and…
In a recent development, a California judge has permanently dismissed the negligence claim brought forward by the Girardi Keese bankruptcy trustee in a lawsuit accusing Western Alliance Bank of assisting with the law firm’s fraud. The trustee’s lawsuit outlined federal regulations and obligations imposed on banks but failed to provide any presiding authority that permits…
The Business Restructuring Review for September-October 2023, volume 22 number 5, provides insightful commentary on the controversial Section 546(e) of the Bankruptcy Code. This “safe harbor” clause seeks to prevent avoidance in bankruptcy of certain securities, commodity, or forward-contract payments. It has been a major point of contention in legal and corporate circles for a…
The legal doctrine of “equitable mootness” is often employed as a barrier to appeals of bankruptcy court orders. This occurs where a potential reversal, or modification of an order, could put at stake various aspects: the execution of a negotiated chapter 11 plan, for instance, or related agreements, thereby distressing the anticipations of third parties…
In a recent legal development, the U.S. Court of Appeals for the Seventh Circuit upheld a summary judgement handed down by a Wisconsin bankruptcy court, in a case titled Mann v. LSQ Funding Group, L.C., (71 F.4th 640 [7th Cir. 2023]), reaffirmed with rejection of rehearing (2023 WL 4684702 [7th Cir. July 21, 2023]). The…
The legal landscape is experiencing evolution as the controversy over the extent to which sovereign immunity of Governmental Units (as defined in the Bankruptcy Code) is waived in bankruptcy avoidance litigation, seems to widen. For context, it’s essential to understand that bankruptcy trustees and chapter 11 debtors-in-possession (“DIPs”) routinely seek to avoid fraudulent transfers. They…
In an important ruling for bankruptcy law professionals, the Ninth Circuit has clarified that the general constitutional standing standard applies to bankruptcy appeals. This decision deviates from the traditional “person aggrieved” standard, putting a microscope on an often controversial legal area. So, what does this change entail? Traditionally, federal appellate courts have applied a “person…
On June 6, 2023, the U.S. Bankruptcy Court for the Southern District of Texas confirmed the chapter 11 bankruptcy plan for bedding manufacturer Serta Simmons Bedding, LLC, and its affiliates, collectively known as “Serta”. The court’s decision is noteworthy as it not only approved but defended a controversial “uptier,” or “position enhancement,” transaction that transpired…
In an influential move within the legal landscape, the court’s expansive interpretation of the term “securities contracts” has broadened the reach of the Bankruptcy Code’s “safe harbor” provision significantly present under section 546(e). This section has consistently been a subject of controversy due to its role in preventing the avoidance of certain types of contractual…
In the continuing fallout from the Siegel case, the United States Supreme Court has agreed to take a fresh look at a topic of immense pertinence to the legal and corporate world alike. The court is set to review the United States Trustee’s appeal from the Tenth Circuit Court of Appeal’s decision that the Office…
In recent news, Rite Aid Corporation, the well-known drugstore chain, is facing severe financial troubles. According to Seward & Kissel LLP, Rite Aid is preparing to file for bankruptcy and plans to close as many as 500 out of its 2,100 stores. A series of complex challenges have contributed to the company’s woes. Primarily, Rite…
The corporate sports world is in a stir, with the recent announcement of a proposed merger between football leagues XFL and USFL. Unsurprisingly, some notable Biglaw firms have begun to play indispensable roles in the proceedings. Specific details around the representation of each league by their respective law firms remain unconfirmed, however. The XFL, owned…
In a recent update from the Supreme Court, twelve new cases have been added to the court’s schedule following its annual “long conference” – a private meeting conducted amongst the justices at the end of September. These cases cover a broad range of contentious topics from social media regulations to property rights, and bankruptcy fees….
The United States Trustee Program, a component within the Department of Justice, carries the responsibility for the efficient administration of bankruptcy cases throughout most of the country. Since its establishment in 1986, it has been operating across all states except for North Carolina and Alabama, where a separate Administrator Program manages bankruptcy filings. While many…
In a recent development, a Virginia bankruptcy judge unsealed an application from Foley & Lardner LLP requesting approximately $2.2 million in fees for its services provided to the Chapter 7 trustee of bankrupt law firm LeClairRyan PLLC. The judge also scheduled a hearing to ascertain whether Foley & Lardner is entitled to the proposed fees….
AGG’s Restructuring Roundup newsletter for September 2023 provides a comprehensive digest of key updates on legal matters impacting commercial litigation and bankruptcy. This monthly compilation features both published articles and news, along with original input from AGG’s acclaimed team of Bankruptcy, Creditors’ Rights, & Financial Restructuring attorneys (Arnall Golden Gregory LLP). The newsletter presents a…