On April 19, 2019, Bankruptcy Judge Robert D. Drain of the Southern District of New York announced his much-anticipated ruling determining the appropriate rate of interest on the replacement notes issued under Momentive’s Chapter 11 plan. The ruling culminated a cramdown contest that had weaved its...
Chapter 11 offers debtors and debtors in possession numerous protections and benefits, including, perhaps most significantly, the concept of a “fresh start” for individuals and entities that submit to the process. Pursuant to Section 1141(d)(1) of the U.S. Bankruptcy Code, when a Chapter 11 plan of...
When Kmart was first faced with bankruptcy in February 2002, its leadership was committed to addressing its operational challenges in an aggressive manner. The team enacted a “fast-track emergence” plan, with the goal of exiting bankruptcy by July 2003. Today’s retail restructuring environment...
When a company is on the bankruptcy highway, one of the goals is to exit as quickly and smoothly as possible, leaving the uncertainty of the process behind and putting all of management’s time into optimizing the business. It’s no wonder, then, that two recent ultrafast bankruptcy cases have caught...
When restructuring a business is necessary, the company and its professionals evaluate options and look for the best and most efficient path forward. This path often leads to a restructuring under the auspices of Chapter 11 of the U.S. Bankruptcy Code. Like any restructuring option, Chapter 11...
Almost since the inception of the U.S. Bankruptcy Code in 1978, many parties in the bankruptcy process have espoused the virtues of speed in accomplishing the desired goals. Certain amendments to the Bankruptcy Code have fostered this desire for speed. But has the pendulum swung too far? Are we...
Since the college admissions scandal broke in March, it has been nearly impossible to avoid headlines about celebrities and top universities caught up in this tangled web of bribery and deceit. The master puppeteer in this saga, William Singer, has been in the college counseling industry for close...
Occasionally, massive tort liability can be the sole reason a company files for Chapter 11 protection. See In re Johns Manville Corp., 982 F. 2d 721 (2d Cir. 1992): In re A.H. Robins Co., 862 F. 2d 1092 (4 th Cir. 1988); In re Dow Corning Corp., 211 B.R. 545 (Bankr. E.D. Mich. 1997). This was the...
Congress designed Chapter 11 to be flexible to promote the twin goals of rehabilitating distressed businesses and maximizing stakeholder returns. 1 Several recent decisions from the U.S. Bankruptcy Court and District Court for the District of Delaware highlight how Chapter 11’s inherent flexibility...
Payment of professionals in Chapter 11 is a complex process intended to ensure transparency and fairness. It can also be a maze filled with traps for the unwary. Professionals for the estate are required to have their engagement approved by the court at the beginning of the case and then to have...