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Local Rules Corner

 

General Articles

Mediation Plays an Important Role in Resolving Bankruptcy Cases

By Daniel J. DeFranceschi

Chapter 11 works best and most efficiently when the restructuring is consensual.


The Third Circuit Affirms a Debtor's Ability to Reject an Expired CBA

By Zachary I. Shapiro

The court held that section 1113 applies to both expired and unexpired collective bargaining agreements.


The Southern District of New York Authorizes the Rejection of Gas Gathering Agreements

By Zachary I. Shapiro

Dismissal of a complaint without prejudice for failure to plead sufficient facts is not a final, appealable order.


Delaware Bankruptcy Court Denies "Fees on Fees" Provision in Retention Application

By Joseph C. Barsalona II

This decision deals a harsh blow to estate professionals.


Delaware Bankruptcy Court Adopts the "Time" Approach to Lease Rejection Damages

By Curtis S. Miller and William M. Alleman Jr.

Judge Kevin Carey provides significant guidance to debtors and landlords calculating rejection damages claims.


What Level of Specificity Is Needed to Preserve Post-Confirmation Claims?

By Siddharth P. Sisodia

A challenging endeavor made easy.


Is Structured Dismissal a Dismissal of Structure?

By Edward Clarkson III

Jevic is the first circuit court decision to affirmatively rule on the issue of whether the Bankruptcy Code allows for structured dismissals.


ABI Commission Issues Recommendations on Preference Laws

By Daniel J. DeFranceschi

Read about Chapter 11 reforms in the new report.


When Does a Chapter 11 Plan Extinguish a Secured Creditor's Lien?

By Zachary I. Shapiro

The Second Circuit outlines the circumstances.


Equitable Mootness Is Alive and Well

By Daniel J. DeFranceschi

A recent Third Circuit decision makes it clear.


Can Warrants Be Deemed "Original Issue Discount" and Disallowed as Unmatured Interest?

By Stuart Komrower and David W. Giattino

Each case must be decided on its unique facts.


No One Gets a Free House—Unless the Statute of Limitations Runs

By Joseph J. DiPasquale and Robert S. Roglieri

Both debtors and secured creditors must be aware of the notable consequences of accelerating mortgages.


Determining Insurance Premium Finance Company's Potential Preference Exposure

By Howard A. Cohen

Timing is everything.


State Law Permitting, Classic Retainers Are Not Property of the Estate

By Zachary I. Shapiro

A retainer remains property of the law firm, not the client.


What Should You Consider When Purchasing Distressed Assets?

By Christopher A. Ward

Be aware of the pitfalls and benefits before venturing down this path.


Parsing the Overhaul of the Bankruptcy Appeals Rules

By Gregory W. Werkheiser

Learn why these revisions will aid the smooth flow of traffic through various courts.


New Limits to Bankruptcy Standing in the Seventh Circuit

By Devoy Dubuque and David R. Doyle

Learn why the court limited the scope in the context of a debtor’s attempt to settle with its primary insurer.


Is Silence Truly Golden?

By John R. Burns

The consequences of asserting the Fifth Amendment in bankruptcy proceedings.


An Interview with the Honorable Hannah L. Blumenstiel

By Jay Geller

The committee is pleased to present an interview with a bankruptcy judge for the Northern District of California.


The House Always Wins: Section 1113 and Debtors with Crippling Labor Expenses

By Curtis S. Miller and Matthew R. Koch

This portion of the Bankruptcy Code may serve as a Trump card for debtors facing expired collective bargaining agreements.


Testimony by Proffer in Bankruptcy Court

By Joseph C. Barsalona II

Learn the allowances, advantages, and pitfalls of this trial technique.


Fourth Circuit's Gold Standard and Interpretations of Good Faith

By Robert C. Maddox

The court adds a little subjectivity to Section 548(c) rulings from other circuits.


Does "Bankruptcy Remote" Mean "Bankruptcy Proof"?

By Jeremy R. Fischer

Learn the differences between these two often mixed-up terms.


Are Estate Professionals Entitled to Compensation for Defending Their Own Fees?

By Catherine Steege

Simply pleasing the client is not enough to get the bill paid.


"Neo Badges": The Evolution of the Badges of Fraud

By Ronald Peterson and Landon Raiford

History shows that the badges evolve to keep up with the creative spirit of those who commit fraud.


Young Lawyer Focus: Determining Insolvency and the Balance Sheet Test

By Jeffrey L. Baliban

Careful consideration must be given to many factors before interpreting this test's results.


An Interview with the Honorable Bruce A. Harwood

By Jay Geller

The committee is pleased to present an interview with the chief U.S. bankruptcy judge for the District of New Hampshire.


The High Court Closes the Statutory Gap in Bankruptcy Procedure

By Catherine Steege and Melissa Root

The Court's ruling reaches the result that lower courts consistently arrived at prior to Stern v. Marshall.


Common Issues When a Party to Litigation Faces Financial Distress

By Mark A. Platt and Ryan E. Manns

Familiarity with certain issues that arise in bankruptcy litigation can help you better protect your client’s economic interest.


When a Settlement No Longer Is Consensual

By Marcos A. Ramos and Cory D. Kandestin

Are no agreements binding until approved by the court?


Rule 37(e) and the Failure to Preserve Sanctions in E-Discovery

By Camisha L. Simmons

This Federal Rule of Civil Procedure undergoes possible revisions.


Can a Pre-Petition State Tax Lien Foreclosure Be Avoided as a Fraudulent Transfer?

By Lynn J. Hinson

A look at Section 548 of the Bankruptcy Code.


Mediation as an Effective Alternative in Bankruptcy Litigation, Part III

By Leif M. Clark

Know the various pitfalls and pratfalls experienced by mediating attorneys.


Treatment of a Discharged Promissory Note with a Residential Mortgage

By Charles Parker II

The broad concern is the lack of case law or Bankruptcy Code section that specifically addresses this issue.


Young Lawyer Focus: Enterprise Value as Distinct from Equity Value

By Jeffrey L. Baliban

In reviewing business valuation reports, it is critical to ask, "What are we valuing?"


Detroit's Pitch for a Pension Pinch

By Devin Burke Hahn

Identify what can hurt clients when you prosecute an appeal.


Preserving Causes of Action Post-Confirmation

By Cory D. Kandestin

The split among various courts can be reconciled.


Voluntary Bankruptcy Adjudication: Why Consent Matters

By Catherine Steege and Melissa Root

Four circuits have addressed this question, each with different outcomes.


When Negotiations Are "Impracticable": Detroit and Chapter 9 Eligibility

By Brendan M. Gage

The troubled Motor City satisfies a key condition to bankruptcy filing.


Applying the Doctrine of Exclusive Appellate Jurisdiction to Bankruptcy Appeals

By Gregory W. Werkheiser and Christopher M. Hayes

Identify what can hurt clients when you prosecute an appeal.


Compelling Arbitration in an Adversary Proceeding

By Laurance J. Warco

More and more bankruptcy and district courts have compelled arbitration against debtors or their trustees.

 

Electricity Does Not Qualify as a Good for Section 503(b)(9) Treatment

By Peter J. Roberts

In re NE Opco, Inc., or Why You Should Have Paid More Attention in Physics Class.


Young Lawyer Focus: Using Financial Ratios

By Jeffrey L. Baliban

Create models that predict financial failure.


Mediation as an Effective Alternative in Bankruptcy Litigation, Part II

By Leif M. Clark

How to use the method effectively in bankruptcy contexts.


An Interview with the Honorable Gregory R. Schaaf

By Jay Geller

The committee is pleased to present an interview with a bankruptcy judge for the Eastern District of Kentucky.

 

Railroads in Bankruptcy: What Happens after a Financial Derailment

By Thomas Rice

New short line railroads face costs that could lead to future bankruptcy cases.


Young Lawyer Focus: Financial Statement Analysis in Determining Solvency

By Jeffrey L. Baliban

Using information from your statements to note potential risks.


Mediation as an Effective Alternative in Bankruptcy Litigation, Part I

By Leif M. Clark

Mediation? I don't need no stinkin' mediation!


Hearsay and Federal Rule of Evidence 801

By Hon. Pam Pepper

The definition of hearsay is fairly straightforward, but there are so many exceptions that they start to subsume the definition.


Seventh Circuit Rules that Transfer of Equity Did Not Violate Absolute Priority Rule

By Michael A. Fagone and Craig T. Nale

The court's opinion should be carefully considered by any parties involved in a contested confirmation involving cramdown of unsecured claims.

 

A Survey of Cases Interpreting Stern v. Marshall, Part VI

By Omar J. Alaniz

The sixth in a series analyzing trends in interpreting the Stern decision.

Part I; Part II; Part III; Part IV; Part V

 

The Latest Supreme Court Decision on Bankruptcy: Bullock v. BankChampaign

By Aaron M. Kaufman

The High Court finally defined the term "defalcation."

 

How a Damages Expert Can Stumble over the Balance Sheet

By Alexander "Sasha" Aganin

Keep track of both sides of the balance sheet when calculating damages.

 

Young Lawyer Focus: Cap Rates Can Be Calculated—And Challenged

By Jeffrey L. Baliban

Understanding cap rates is crucial in supporting or challenging valuation opinions.


A Survey of Cases Interpreting the Stern Decision, Part V

By Omar J. Alaniz

This fifth part in the series is a synthesis and discussion of the cases that have meaningfully discussed Stern from October 16, 2012, through January 15, 2013.

Part I; Part II; Part III; Part IV


Issues Surrounding the Use of Lay Witnesses

By Hon. Pam Pepper

A judge gives her expert views on nonexpert witnesses.


An Interview with Judge Donald R. Cassling

By Robert Fishman and Jay Geller

A judge gives her expert views on nonexpert witnesses.


Appeals Court Addresses Retention of Postconfirmation Standing

By Thomas Rice

A judge gives her expert views on nonexpert witnesses.


A Survey of Cases Interpreting the Stern Decision, Part IV

By Omar J. Alaniz

This fourth part in the series is a synthesis and discussion of the cases that have meaningfully discussed Stern from July 16, 2012, through October 15, 2012.

Part I; Part II; Part III


Cram-Down Interest Rates: What Till Tells Us (or Not)

By Jeffrey L. Baliban

A used pickup truck may provide guidance for a multi-billion-dollar commercial mortgage portfolio.


Particular Evidence Problems with Appraisals, Part III: Expert Witnesses

By Hon. Pam Pepper

While bankruptcy litigants need to call experts to testify about scientific issues, more frequently they call nonscientific experts.

Part I; Part II


Collateral Attacks on Sale Orders, Due Diligence, and the Barton Doctrine

By James E. Bailey III and Paul S. Murphy

What happens when a trustee sells an asset that the estate did not own?


A Survey of Cases Interpreting the Stern Decision, Part III

By Omar J. Alaniz

The number of sources citing Stern exceeded the 1,000 mark in early July 2012.


A Primer on Discount Rates, Part III

By Jeffrey L. Baliban

Bankruptcy professionals encounter complex issues when dealing with fraudulent conveyance claims, and other issues related to analyzing solvency.

Part I; Part II


Particular Evidence Problems with Appraisals, Part II

By Hon. Pam Pepper

Defeating a hearsay objection to the admission of an appraisal report is only one hurdle that parties have to jump if they want to use an appraisal report to prove value.


Interview with Hon. James P. Smith

By Robert Fishman and Jay Geller

The committee is pleased to provide an interview with Hon. James P. Smith, U.S. Bankruptcy Judge for the Middle District of Georgia.


For Both New and Experienced Lawyers—Particular Evidence Problems with Appraisals

By Hon. Pam Pepper

One of the most powerful tools in a lawyer's valuation arsenal is the report of a professional “valuer.”


A Survey of Cases Interpreting the Stern Decision, Part II

By Omar J. Alaniz

This article is the second in a multipart series that provides an overview of trends in interpreting Stern v. Marshall.


A Primer on Discount Rates

By Jeffrey L. Baliban

This is the second in a four-part series addressing the issues bankruptcy professionals encounter when dealing with fraudulent conveyance claims and other issues related to analyzing solvency.


The Role of a Receiver in a Bankruptcy Case

By Thomas Rice

While the filing of a bankruptcy case typically means that a receiver is required to turn over the assets to representatives of the estate, but it is not a foregone conclusion that the receiver must step aside.


A Survey of Cases Interpreting the Stern Decision

By Omar J. Alaniz

This article is the first in a multipart series that will provide an overview of trends in how courts are interpreting Stern v. Marshall.


Assessing Costs in Third-Party Discovery Under F.R.C.P. 45(c)

By Meghan E. Bishop

Common criticisms of litigation, namely time and expense, can be primarily attributed to discovery.


Interview with the Honorable Tracey N. Wise

By Robert Fishman and Jay Geller

The committee is pleased to provide below an interview with the Honorable Tracey N. Wise, Chief United States Bankruptcy Judge for the Eastern District of Kentucky.


Measuring Reasonably Equivalent Value

By Jeffrey L. Baliban

This article is the first in a four-part series addressing the complex issues bankruptcy professionals encounter when dealing with fraudulent conveyance claims and other issues related to analyzing solvency.


Reliance on Client's Automated Information System May Support Rule 9011 Liability

By Marcos A. Ramos

Counsel's reliance on a client lender's information systems can lead to the imposition of sanctions against not only the client, but also against counsel.


Interview with the Honorable Shelley C. Chapman

By Robert Fishman and Jay Geller

An insightful interview with the Honorable Shelley C. Chapman, U. S. Bankruptcy Judge for the Southern District of New York.


Can You Sail into the Safe Harbor?

By Howard Weg and Kathryn Russo

Second Circuit holds that a chapter 11 debtor's pre-petition payments for early redemption of its publicly traded commercial paper were “settlement payments” under section 546(e) of the Bankruptcy Code.


Contingent Claims and Solvency Analysis Part IV

By S. Todd Burchett and L. Rand Gambrell

This is the fourth article in a four-part series on quandaries for bankruptcy trustees as they evaluate contingent liabilities against, and the solvency of, companies in bankruptcy.


Lessons Learned on Preference Pleading Requirements to Satisfy Twombly and Iqbal

By James P. Menton Jr.

Miller v. Mitsubishi proves the importance of providing factual allegations in the complaint to support pleading preference claims.


Avoiding Common Pitfalls: Tips For Young Lawyers

By Betsy Collins, Ian Fisher, and Kent Lambert

Words of wisdom to younger lawyers in the hope that they will be able to avoid some of the headaches seasoned lawyers have experienced.


A Test for Determining Whether a Claim Is Derivative or Direct

By Deborah D. Williamson

Just as bankruptcy follows bank failure, often litigation follows in the form of derivative or direct claims against officers and directors of the failed bank and its holding company.


Litigation Claims in Consumer Bankruptcy Cases

By Deborah B. Langehennig

Courts have split on Chapter 13 issues with decisions turning on plan-vesting provisions, the nature of the cause of action, and the debtor's chosen exemption scheme.


Interview with the Honorable H. Christopher Mott

By Robert Fishman and Jay Geller

The committee is pleased to provide an interesting and insightful interview with the Honorable H. Christopher Mott, U.S. Bankruptcy Judge for the Western District of Texas.


Contingent Claims and Solvency Analysis Series Part III

By S. Todd Burchett, Donald C. Wengler, and L. Rand Gambrell

The valuation of contingent liabilities remains an evolving area for valuation professionals, with best practices continuously being challenged and revised.


Interpreting Creditor Silence under Section 1129 of the Bankruptcy Code

By Kevin J. Mitchell

The Bankruptcy Code provides no clear guidance on the question of whether creditor silence should be deemed an acceptance or a rejection, and case law has not provided consistent guidance.


A Bankruptcy Submission Hold

By Jay S. Geller and Jeremy R. Fischer

The sharp increase in the number of bankruptcy cases has been coupled with a similar mushrooming of bankruptcy-related litigation.


What Does a Chapter 11 or 7 Trustee, Examiner, or Receiver Need?

By Bettina M. Whyte

It is always helpful to understand what is going on in the mind of the person who is going to hire you as counsel.


Contingent Claims and Solvency Analysis Series Part II

By S. Todd Burchett, Donald C. Wengler, and L. Rand Gambrell

Current accounting requirements for contingencies present many challenges to companies and practitioners.


Pointers for Pleading Preferential and Fraudulent Transfer Claims

By Una Young Kange

These cases provide a measure of guidance for practitioners who may be wondering what it takes to satisfy the heightened pleading requirement.


Recognition of U.S. Plan Confirmation Orders by Canadian Courts

By Adam C. Maerov and Jeffrey Fung

Guidance on Canadian Court Considerations of U.S. Bankruptcy Court decisions


Contingent Claims & Solvency Analysis
Part I: A Known Defective Product; Claims Unknown, but Probable

By S. Todd Burchett, Donald C. Wengler, and L. Rand Gambrell

It is not uncommon for a company with a defective product, significant litigation, or both to find itself in bankruptcy.


Part 2: Retaining Post-Confirmation Subject-Matter Jurisdiction in the Fifth Circuit

By Thomas Rice

Ruling on a debtor's attempt to retain the right to pursue claims and causes of action after confirmation.


Part 1: Retaining Post-Confirmation Subject-Matter Jurisdiction in the Fifth Circuit

By Thomas Rice

Ruling on a debtor’s attempt to retain the right to pursue claims and causes of action after confirmation.


ASARCO Decisions Elucidate Requirements for "Substantial Contribution" Claims

By Christopher Castillo and Brooks Hamilton

Two recent decisions denied substantial contribution requests by two different groups of creditors.


Recent Decisions May Stop Secured Creditors from Credit Bidding

By Elena González

Decisions will affect the relationship between secured lenders and distressed debtors.


"Going Concern" and "Deathbed," Metaphors in Avoidance Litigation

By David R. Weinstein and Danelle Kelling

Proving "insolvency" is often a central feature of avoidance litigation.


The Attorney-Client Privilege in Bankruptcy

By Ann D. Zeigler

Attorneys cannot count on being an interested bystander when the corporate client gets in trouble.

 

Bankruptcy 101: Cash Collateral and DIP Financing

By Kevin M. Lippman and Jonathan L. Howell

With Chapter 11, a debtor will need to use cash subject to a lien of a secured creditor and/or obtain postpetition financing to keep operating.


Supreme Court Upholds Debt Relief Agency Provisions

By Stephen W. Sather

Provisions prohibiting agencies from advising debtors to incur debt in contemplation of bankruptcy are constitutional.


Senate Defeats Mortgage Modifications Legislation

By Anting J. Wang

Bill would have granted bankruptcy judges limited power to "rewrite" mortgages on primary residences.


Bankruptcy 101: Nonresidential Tenant Bankruptcies

By Kevin Lippman and Jonathan L. Howell

The automatic stay is a legal fiction that springs into effect automatically upon the filing of a bankruptcy petition.


Developments in Derivative Standing [PDF]

Mark A. Platt, Anna Maria Mendez, Deborah D. Williamson, and Patrick Conroy Jr.

Derivative standing is based on unclear and varying authorities, statutory interpretations, and multipart tests.


Allowance of Attorney Fees to an Unsecured Creditor [PDF]

By Ralph Brubaker


Bankruptcy Buyer Beware [PDF]

By Aram Ordubegian


Insolvency Along the NAFTA Highways: What You Need to Know: Mexican Paper [PDF]

By José Víctor Rodríguez Barrera


Insolvency Along the NAFTA Highways: What You Need to Know: Canadian Paper [PDF]

By Brett Harrison and Julien Brazeau


The Role Played By Rating Agencies in the Subprime Debacle

By Andrea Kim and Reda Dennis


Proving Solvency Through Evidence of Public Trading

By Michael R. Lastowski


New Meaning of Ordinary: Anything Short of Extraordinary

By Pamela Egan Singer


Local Rules Corner

The Bankruptcy & Insolvency Litigation Committee is pleased to announce a new series of articles that will focus on the local rules of particular bankruptcy courts. The aim of this series is to provide a quick, selective discussion of certain litigation-related local rules of different bankruptcy courts. Our aim is not to cover all of the local rules but instead to provide a very summary discussion of the identified local rules.


In the first article (see below), we focus on the Local Rules of Bankruptcy Practice and Procedure of the U.S. Bankruptcy Court for the District of Delaware, effective as of February 1, 2012. We hope that you find this article to be informative. Future articles will discuss the local rules of other bankruptcy courts. Over time, we expect to add articles that compare and contrast particular rules of different bankruptcy courts.


Remember, if you are interested in contributing to this series, simply contact one of our web editors or assistant editors. Be assured, your desire to contribute is encouraged and appreciated! In any event, be sure to check back periodically with the Local Rules Corner to review our new articles.


Western District of Michigan: Local Rule Specific to Health Care Businesses

By Charles Parker II


Delaware Bankruptcy Court: Mandatory Mediation Update

By Marcos A. Ramos


Maine Bankruptcy Court

By Jeremy R. Fischer


Delaware Bankruptcy Court

By Marcos A. Ramos