"Hidden Gems" in BAPCPA
While much of the attention on the business side of BAPCPA has been focused on the demise of KERPS, the capping of exclusivity and limitations on extensions of time to assume or reject commercial leases, several other provisions may prove as, if not more, nettlesome to debtors attempting to reorganize, particularly in small- and smaller-cap chapter 11 cases.
First Circuit Reverses No-fault Subordination of Stock Redemption Notes
by Robert J. Keach
Long-standing precedent in the First Circuit had held that claims arising out of stock redemptions, including notes payable to the former shareholders as the consideration for the redemption of their stock, were subject to subordination to the claims of creditors when the corporation later became insolvent without any showing of inequitable conduct on the part of the shareholders. See Matthews Bros. v. Pullen, 268 F. 827 (1st Cir. 1920); Keith v. Kilmer (In re Nat’l Piano Co.), 261 F. 733 (1st Cir. 1919). In a recent decision, the First Circuit, finding that intervening Supreme Court rulings were contrary, reversed that precedent to the extent it created no-fault subordination of such claims as a class. Merrimac Paper Co., Inc. v. Harrison (In re Merrimac Paper Co., Inc.), No. 05-1010 (1st Cir., August 25, 2005).
The Committee Welcomes Deborah Crabbe as e-newsletter Editor-in-Chief
The co-chairs of the Business Reorganization Committee are pleased to announce that Deborah Crabbe of Foster, Pepper & Shefelman PLLC, Seattle, Wash. has agreed to serve as the editor-in-chief for the committee’s e-newsletter. Deborah is an active volenteer with ABI and the committee. She chaired the Small Business Subcommittee and served as a member of the editorial board for the “News at 11” column in the ABI Journal. Individuals who would like to contribute articles or short pieces to the e-newsletter, including serving on the standing board of contributors, should contact Deborah at crabd@foster.com.
Business Reorganization and Investment Banking Committees to Present Joint Program at Winter Leadership Conference
The Business Reorganization and Investment Banking Committees of ABI will combine to present a program entitled "Unique Issues in Gaming, Hospitality and Entertainment Venue Reorganization Cases” at ABI’s upcoming Winter Leadership Conference in Indian Wells, Calif.. The program will be held at 3:45 p.m. on Friday, December 2, 2005, as part of the WLC’s high-quality CLE agenda. The panel will focus on the unique problems that arise in casino, hotel, theme park and related companies' chapter 11 cases. Each of these types of debtors has business or non bankruptcy law-related considerations that drive decisions and actions that must be taken in their reorganization proceedings. The panel will discuss how to address the special problems that arise in these cases, such as first-day orders, dealing with the regulators, use of cash collateral, sales of assets and plan content and confirmation. Panelists will draw on the wealth of their experiences in such cases to suggest practical solutions to the problems presented. In light of recent event, and the continued crises in the airline and other transportation sectors, this is sure to be a timely and important program for the committee’s membership and the rest of the insolvency community.