Articles & Media

The article discusses the impact of the eviction moratorium on small landlords, who have been unable to collect rent from their tenants due to the Covid-19 pandemic. The article explains the legal and economic challenges faced by landlords, and offers some possible solutions, such as applying for mortgage relief, negotiating with tenants, and seeking legal advice. The article also warns of the potential consequences of the eviction moratorium for the housing market, such as reduced supply, increased prices, and lower quality. The article is based on data from the U.S. Census, the Federal Reserve Bank of Philadelphia, and the Treasury Department, as well as court rulings and expert opinions.

The article explores the possibility of unsecured creditors suing the directors and officers of a bankrupt company for breach of fiduciary duty, based on a recent court decision in the Nine West case. The article explains the legal and practical challenges that creditors face in pursuing such claims, such as the business judgment rule, the exculpation clauses, the releases and injunctions, and the distinction between direct and derivative claims. The article also highlights the implications of the Nine West decision for trade credit executives, who may have another option to recover their losses in Chapter 11 cases. The article is based on data from the U.S. Census, the Federal Reserve Bank of Philadelphia, and the Treasury Department, as well as court rulings and expert opinions.

The appointment of independent directors has become increasingly common in bankruptcy proceedings. However, concerns have arisen regarding the true independence of these directors. To address these concerns, the article proposes a set of enhanced disclosure requirements for independent directors. These requirements would require directors to disclose their relationships with the debtor, its professionals, and other parties involved in the bankruptcy case. The article also recommends that directors have the authority to appoint independent counsel and financial advisors. By implementing these enhanced disclosure requirements, bankruptcy courts and creditors can gain a clearer understanding of the true independence of directors and ensure that they are acting in the best interests of all stakeholders. In addition to the proposed disclosure requirements, the article also provides a number of additional insights and recommendations. These include: The need for greater scrutiny when evaluating director independence in bankruptcy cases. The importance of transparency in the bankruptcy process. The role of bankruptcy courts in ensuring that directors are acting in the best interests of all stakeholders. Overall, the article provides a valuable contribution to the discussion of director independence in bankruptcy cases. It raises important concerns about the potential for conflicts of interest and offers a number of practical recommendations for addressing these concerns.

Vendors in bankruptcy proceedings often face uncertainty and financial risks due to the complexities of the process and potential misconceptions about vendor protections. This article aims to dispel common myths and provide insights into navigating the bankruptcy landscape effectively. Key Points Administrative claims do not guarantee full payment, and critical vendor status is not an automatic assurance of reimbursement. Vendors are not obligated to continue pre-bankruptcy credit terms, and 20-day claims should be valued differently than regular unsecured claims. Supporting a debtor's reorganization does not guarantee long-term customer retention, and the "too big to fail" notion is often misleading. Recommendations Vendors should exercise caution, seek professional advice, and understand their rights to protect their financial interests throughout the bankruptcy process.

This article discusses the potential for single-asset real estate (SARE) cases to provide a solution to preserve real estate value during the COVID-19 pandemic. The author argues that suspending restrictions on SARE cases would enable the bankruptcy court to be a better venue for value preservation of real estate. The author also argues that this solution would reinforce the balance of socio-economic and equitable considerations.

Expedited Chapter 11 bankruptcies are becoming increasingly popular as a way for financially distressed companies to restructure their debts and avoid liquidation. These cases are typically characterized by a prepetition restructuring process, in which key stakeholders negotiate a reorganization plan before filing for bankruptcy. This can help to streamline the bankruptcy process and minimize costs. However, there are concerns that expedited Chapter 11 cases may compromise due process, as creditors and other parties may not have enough time to participate meaningfully in the proceedings. The article argues that expedited Chapter 11 cases can be a valuable tool for financially distressed companies, but that it is important to strike a balance between speed and fairness. The authors recommend that companies engage in thorough prepetition restructuring and maintain open communication with all stakeholders throughout the bankruptcy process. They also suggest that companies seek legal counsel from experienced bankruptcy professionals to navigate the complexities of expedited cases. Key takeaways: Expedited Chapter 11 bankruptcies can be a cost-effective way for financially distressed companies to restructure their debts. Prepetition restructuring is important for streamlining the bankruptcy process. Due process concerns should be addressed in expedited cases. Experienced bankruptcy professionals can help companies navigate the complexities of expedited cases.

Compositions are an informal agreement between a debtor company and its unsecured creditors, where creditors agree to accept reduced payments or extended payment terms in lieu of pursuing full repayment through bankruptcy or other legal means. This approach offers several benefits to both parties: For debtors, compositions provide a more flexible and cost-effective path to debt restructuring, avoiding the stigma and legal complexities of bankruptcy. For creditors, compositions offer a higher likelihood of recovering some portion of their debt compared to bankruptcy, where full repayment is often unlikely. To effectively negotiate a composition, several factors should be considered, including creditor consensus, transparency and communication, financial analysis and projections, and professional representation. Tactical approaches to composition negotiations include identifying and engaging friendly creditors, preparing a compelling presentation, anticipating creditor concerns, and maintaining control of the process. The choice of meeting format can significantly impact the dynamics of composition negotiations, with options including face-to-face meetings, conference calls, and online videoconferences. By carefully considering these factors and employing strategic approaches, businesses can increase their chances of achieving a successful composition, regaining financial stability, and ensuring long-term viability.

Vendors face a critical task in safeguarding their financial interests amidst the economic turmoil caused by the COVID-19 pandemic. This guide provides a comprehensive overview of insolvency determinations and practical strategies for vendors to navigate these complex situations. The article emphasizes the importance of understanding insolvency definitions, assessing customer financial health, identifying red flags, and protecting vendor interests. By following these guidelines, vendors can effectively manage their customer relationships and ensure their own financial security in an ever-evolving economic landscape.

The COVID-19 pandemic and the ensuing economic turmoil have brought unprecedented challenges to the real estate industry, leaving many owners and investors facing the prospect of restructuring or bankruptcy. While bankruptcy can offer a lifeline for these entities, single asset real estate (SARE) debtors face unique obstacles due to the current Bankruptcy Code, which favors mortgagees. This article highlights the challenges faced by SARE debtors and advocates for reforms that would empower bankruptcy courts to provide SARE debtors with a fair and equitable restructuring process. Specifically, the article proposes modifications to Section 362(d)(3) of the Bankruptcy Code and the utilization of Section 105(b) to grant SARE debtors more flexibility and protection. The article also addresses concerns raised by lenders and emphasizes the need for market efficiency. It argues that bankruptcy courts are equipped to assess the adequacy of protection for lenders and identify instances of bankruptcy abuse. In conclusion, the article emphasizes that bankruptcy should not be viewed as a last resort but rather as a strategic tool for SARE debtors to navigate the current economic crisis and emerge stronger. By reforming the Bankruptcy Code and empowering bankruptcy courts, the real estate industry can foster a more resilient and equitable landscape.

This article provides a guide for CFOs on how to navigate the turbulent waters of bankruptcy and protect their position and thrive in restructuring. Here are the key strategies to consider: Demonstrate Invaluable Expertise: Showcase your deep understanding of the company's financial situation and provide the CRO with accurate and timely information. Become the CRO's trusted advisor, ensuring they have the insights they need to make informed decisions. Channel Communication Effectively: Serve as the primary point of contact for the CRO, ensuring all information flows through you. This allows you to control the narrative and prevent any misinterpretations or misunderstandings. Protect the Board's Interests: Keep the board informed of all developments and proactively address any potential concerns. Build a strong relationship with the board, establishing yourself as their trusted advisor and advocate. Build Relationships with Creditors: Cultivate positive relationships with creditors and their representatives. Engage in regular communication, addressing their concerns and building trust. Proactive Communication is Key: Keep the CRO informed of any potential issues or concerns raised by creditors or other stakeholders. This proactive approach helps prevent surprises and allows for timely intervention. Treat the CRO as a Potential Employer: View the CRO as a potential future employer, demonstrating professionalism and a willingness to collaborate effectively. By following these strategies, CFOs can not only protect their position but also make themselves indispensable to the company's restructuring efforts. By demonstrating their expertise, building strong relationships, and maintaining transparency, CFOs can navigate the turbulent waters of bankruptcy and emerge as trusted advisors, paving the way for a successful restructuring.