Bryan Gaston
AlixPartners LLP; Dallas
Several recent high-profile chapter 11 cases have involved environmental liabilities and highlight how significant these liabilities can be to the restructuring process. Though environmental liabilities often have some form of security associated with them (e.g., letters of credit, surety bonds, etc.) prior to a debtor filing its bankruptcy petition, because of their nature, environmental liabilities may still create the need for significant reserves in order to accommodate contingent claims. Further complicating matters, many environmental claims involve multiple parties with indemnity and contribution rights against each other.
Read the full article.
by Paul Clancy
St. John's University School of Law; New York
The Bankruptcy Code, under § 553, expressly preserves a creditor’s pre-petition right to setoff of mutual debt with the debtor. However, courts have consistently rejected the permissibility of triangular setoff under § 553. Courts premise this prohibition of triangular setoff on section 553’s use of the term “mutual debt.” Courts have rationalized that because triangular setoff does not contemplate setoff of debts that are held between the same parties, triangular setoff lacks the mutuality of debts that § 553 requires. The permissibility of triangular setoff in bankruptcy has become uncertain, though, when a creditor asserts a right to triangular setoff pursuant to a pre-petition contract. The issue has arisen whether a pre-petition contract allows parties to bypass the mutuality required by § 553.
Read the full article.
On behalf of our distinguished faculty and Advisory Board, we are pleased to invite you to attend VALCON2011 at the Four Seasons Hotel, Las Vegas. VALCON2011 is a unique opportunity to meet some of the leading professionals and dealmakers in the distressed debt, restructuring and valuation business. The conference is a "can't miss" if you are a dealmaker, fund investor, or financial or legal advisor. Additionally, we will be offering breakout tracks on valuation fundamentals and technical valuation. Attendees can earn up to 15 hours of CLE and 18 hours of CPE. To view the conference and register, please click here.
The Business Reorganization Committee is searching for publications for its Newsletter. If you are interested in having an article published in this Newsletter, please contact Brad Sandler at bsandler@pszjlaw.com or by phone at 302.778.6424, or any of the Committee leaders.
