Baker & McKenzie LLP; Chicago
It has been a basic principle of U.S. commercial law that secured creditors have the right to credit-bid up to the full face amount of their debt at an auction of their collateral. However, the U.S. Court of Appeals for the Third Circuit recently created a bankruptcy plan exception to this well-established rule. It held in In re Philadelphia Newspapers LLC[1] that a debtor can prevent a secured lender from credit-bidding simply by designating its intent to provide the secured lender with the “indubitable equivalent” of its interest in the collateral under a bankruptcy plan, over the secured lender’s objection, forcing the secured lender to accept the result pursuant to the “cramdown” provisions of § 1129(b)(2)(A)(iii) of the Bankruptcy Code.[2]
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The Garden City Group Inc.; Chicago
AlixPartner LLP; Chicago
The claims process is a fundamental part of every bankruptcy case, in that it establishes the overall amount owed to a debtor’s creditors as of the filing date of the debtor’s case. The process commences with the filing of a debtor’s schedules of assets and liabilities, as well as a statement of financial affairs (SOFAs), which set forth the amount of secured, priority unsecured and general unsecured claims as showing on the debtor’s books and records as of the filing date. Each creditor has the opportunity to file a proof of claim against the debtor, to which the debtor may object. Only upon a bankruptcy court’s entry of final order(s) in a case may a debtor and the creditors know the full scope and amount of the claims against the debtor.
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Stout Risius Ross Inc.; Detroit
Subsequent to the Bankruptcy Abuse Prevention and Consumer Protection Act Of 2005 (BAPCPA), the “ordinary-course” defense to preferences has become significantly more prevalent for creditors seeking to defend against preference actions.[1] This act modified the requirements for the “ordinary course” defense, making it necessary only to prove that the transfers occurred in the ordinary course within the industry or between the parties, rather than the previously more stringent “and” requirement. The change effectively made the ordinary course preference defense easier and less costly.
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Wardrop & Wardrop, PC; Grand Rapids, Mich.
The first year of practice after law school is an exciting, yet humbling, experience for brand new associates, especially if starting in a field that is new and unfamiliar. For me, it was “exciting” because, after years of hard work, deadlines, sleepless nights and dreaded finals, I thought I was finally in a position to apply the golden nuggets of law I had accumulated during my academic career. It was also “humbling” as I realized after a few months of practice how much I had yet to learn.
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Haynes and Boone, LLP; Houston
Certainty in business translates into increased expenses for both buyers and sellers, or in the chapter 11 context, debtors and creditors. The Eleventh Circuit Court of Appeals has increased debtors’ and creditors’ costs of doing business by issuance of its opinion in Marathon Petroleum Co. v. Cohen (In re Delco Oil Inc.), 599 F.3d 1255 (11th Cir. 2010).In Delco, the court of appeals affirmed the bankruptcy court’s holding that payment for goods ordered and received by the debtor in possession (DIP) post-petition in the ordinary course of business were recoverable as unauthorized transfers. The holding was based on the fact that the debtor had not obtained approval to use cash collateral. Creditors must now perform (and debtors must cooperate with) more due-diligence when doing business with DIPs.
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Your 2010-2011 Young & New Members Committee Co-Chairs Announced
The ABI is pleased to announce your new Young & New Members Committee Co-Chairs. Thomas M. Horan of Womble Carlyle Sandridge & Rice PLLC in Wilmington, Del. and Joshua J. Lewis of Parker, Hudson, Rainer & Dobbs LLP in Atlanta have accepted the positions for the 2010-2011 term. Mr. Lewis moves up from his previous committee position as Education Director and Mr. Horan continues as Co-Chair for another year.
The ABI would also like to thank Kathryn Pamenter of The Garden City Group, Inc. in Chicago for her serivice as Co-Chair. Ms. Pamenter has contributed greatly to the leadership of the committee over the past three years. The ABI looks forward to working with her in other capacities going forward. To view a complete list of your current committee leaders, please click here.
