Search Results for: "Creditor"
“A defense to a claim allowing the defendant to reduce the amount it must pay to the plaintiff by the amount that the plaintiff owes to the defendant in connection with the contract or transaction on which the plaintiff seeks recovery. The right of recoupment is similar to the right of setoff but with three important distinctions. First, recoupment is available to a creditor seeking to offset prepetition debts against postpetition debts. By contrast, setoff is not available to a creditor under such circumstances because it applies only to an […]
“An exception to the absolute priority rule that enables holders of equity to retain their equity interests in the debtor even though a senior non-accepting class has not been paid in full, if the equity holders contribute new capital or other form of acceptable “value” to the debtor. The rationale for the new value exception (or new value corollary, as it has sometimes been called) is that if the equity holders contribute “new value” under a plan, they are not running afoul of the absolute priority rule’s fundamental prohibition of […]
On July 20, 2015, the Great Atlantic & Pacific Tea Company, made history by filing what we in the restructuring industry like to call “Chapter 22 Bankruptcy.” Read more to see how this case unfolded and what it means for struggling grocers and retail stores.
The Assignee, Joseph J. Luzinski will conduct an auction with respect to the sale of the assets of Aerion corporation on September 16, 2022, at 9:00 a.m. EST.
“A lease that has the characteristics of an operating lease, as opposed to a lease that has the characteristics of a financing. Courts look to a number of factors to distinguish “true leases” from leases that are disguised financing transactions. The determination usually hinges on whether the term of the lease is materially less than the useful life of the leased property and whether the lessee must pay the fair market value of the property to acquire it during or at the end of the lease term. If the agreement […]
“The requirements, set out in Section 1129, that a plan proponent must satisfy to obtain confirmation of its Chapter 11 plan. One of those requirements is the do-or-die requirement that if any class is impaired under the plan, at least one impaired class must accept the plan by two-thirds in amount and a majority in number of those voting. The proponent must also show, among other things, that: The plan is feasible Creditors will receive under the plan at least as much as they would receive if the debtor’s assets […]
“Honesty of intention, freedom from knowledge of circumstances that would put a reasonable person on inquiry, and an absence of design to gain an improper advantage. Referred to by courts as an “overriding principle of bankruptcy administration,” the concept comes into play throughout a bankruptcy case—from the filing of the case, to the protection of certain persons doing business with the estate, to the potential applicability of certain defenses asserted by a transferee, to the filing of a plan. For example: If a debtor files a bankruptcy case with a […]
“This is an interesting theoretical possibility but is seldom, if ever, actually seen. A plan that does not impair any class of creditors and thus does not have to be accepted by any class of creditors. Such a plan need not comply with the One-Impaired-Class-Must-Accept-The-Plan Rule since there is no impaired class. While non-impairment generally requires that contractual rights not be altered in any respect, Section 1124 provides that a class of claims can be deemed unimpaired and therefore to have accepted the debtor’s plan if the plan: cures any […]
AUCTION OF ASSETS OF Confidential Company Offer Deadline. August 19, 2022 at 5:00 pm Pacific Time. NDA Deadline. August 5, 2022 Background. The Confidential Company develops, produces, and sells designer furniture and related goods to consumers, architects, interior designers and contract dealers. Manufacturing is largely domestic. The Company is the subject of an assignment for the benefit of creditors. Process Overview. The prospective Assignee will provide a form asset purchase agreement (“APA”) to interested parties who have executed a non-disclosure Agreement (“NDA”) by the NDA Deadline. Letters of Intent in the form of a redline to the APA (containing the additional information as may be required by the prospective Assignee) must be received no later than the Bid Deadline. The winning bidder will be selected and notified by the prospective Assignee on August 22, 2022. The selection of the winning bidder is in the prospective Assignee’s absolute discretion. The winning […]
The Sixth Circuit would quote Ohio case law to explain that “A contract of novation is created where a previous valid obligation is extinguished by a new valid contract, with the consent of all the parties, and based on valid consideration.” In a sense, a novation establishes that the prior contract is fully performed by the novated contract.