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| vol 21, num 2 | October 2023 |
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| The Importance of the Recent In re Palm Springs Fifth Circuit Decision |
| On April 17, 2023, the Fifth Circuit issued a decision that demonstrated considerable deference to the bankruptcy court’s determination that a senior lender affiliated with the debtor remained a “good faith purchaser” when submitting a credit bid to purchase the debtor’s real property.
Factual Background
In November 2016, Palm Springs, LLC (the developer), a commercial real estate developer and the original owner of real property at issue in Palm Springs, Calif. (the property), contracted with SR Construction (the contractor) to develop and build a hotel. Approximately one year later, Hall Palm Springs LLC (the secured lender) provided additional financing. In connection with this additional financing, the developer and the secured lender executed a subordination agreement that provided the secured lender with priority over the contractor.
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| First-Day Hearings and the Due Process Balancing Act |
| Due process is a fundamental right, reiterated in the foundational documents of the U.S. All lawyers are taught and tested on the requirements of due process, both in a procedural and substantive context. As a review, “procedural due process” requires that the deprivation of life, liberty or property by adjudication be preceded by notice and opportunity for hearing appropriate to the nature of the case.
Chapter 11 bankruptcy proceedings are complex legal mechanisms designed to facilitate the financial restructuring of businesses facing insolvency. One critical aspect of this process is the filing and consideration of first-day motions, which are motions filed promptly after the debtor’s petition. These motions serve to expedite the debtor’s transition into chapter 11, addressing immediate financial concerns and procedural matters. First-day motions present unique notice issues given the need to balance the due-process rights of affected parties with the debtor’s need for expedited relief and the practical difficulty of providing adequate notice very early in the case.
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| 2023 "40 Under 40" Emerging Leaders in Insolvency Practice Announced |
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Last week, ABI announced the honorees of its 2023 “40 Under 40” award program, which annually identifies 40 top industry professionals under age 40. ABI “40 Under 40” honorees are distinguished by their professional achievements and service, and are selected by a group of experienced insolvency professionals. This year’s honorees will be recognized at a special ceremony on Dec. 1 during ABI’s 2023 Winter Leadership Conference at the Fairmont Scottsdale Princess in Scottsdale, Ariz. Take a look at our press release.
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| Register Today for ABI'S Winter Leadership Conference |
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| Join the Ethics and Professional Compensation Committee November 30 - December 2 in Scottsdale, Ariz., at ABI's Winter Leadership Conference — one of the biggest insolvency events of the year! Mix professional development and networking at a variety of timely educational sessions, networking events and optional programs.
This year, the committee will be pairing with the Young & New Members Committee to host a session titled, "Intersection of Arbitration and Bankruptcy."
Speakers for this session include:
- Justin R. Alberto of Cole Schotz P.C.; Wilmington, Del.
- Alexis A. Leventhal of Reed Smith LLP; Pittsburgh
- Jim Shea of Sidley Austin LLP; Los Angeles
- Hon. Stacey G. C. Jernigan U.S. Bankruptcy Court (N.D. Tex.); Dallas
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