In its recent decision in In re Orexigen Therapeutics Inc.,[1] the Third Circuit Court of Appeals held that triangular setoffs are not permissible in bankruptcy because they do not satisfy the mutuality requirement of § 553 of the Bankruptcy Code.
Committees
In the days leading up to a chapter 11 filing, companies seeking bankruptcy protection commonly ask whether they can continue to pay some of their vendors after the bankruptcy case is filed. On the flip side, in the days following a chapter 11 filing, vendors whose customer recently filed a bankruptcy case have the same question: Can we still get paid?
Readers of this newsletter will note our regular interest in the chapter 11 proceedings of Cred Inc. and its affiliates.
A recent decision in the criminal case against the founder of a now-defunct-but-once-cutting-edge life science start-up affirmed that corporate attorney/client privilege lies in the hands of estate fiduciaries, not the company or its executives.
The Small Business Reorganization Act (SBRA) became effective in February 2020.[1] The SBRA, or subchapter V, is intended to encourage small businesses to use the Bankruptcy Code to reorganize by reducing the costs and administrative burdens associated with a typical chapter 11 case.
The U.S. Trustee Program (USTP), an arm of the Department of Justice that provides oversight for bankruptcies in all but two states, is funded by fees charged to debtors (U.S. Trustee fees). In Alabama and North Carolina, a Bankruptcy Administrator program, run by the Judicial Conference of the United States, provides a similar function and charges its own fees (Bankruptcy Administrator fees).
One of the most popular support programs developed through the enactment of the Coronavirus Aid, Relief, and Economic Security (CARES) Act was the Paycheck Protection Program (PPP). This program was administered by the U.S. Small Business Administration (SBA) through participating lenders throughout the U.S.
Chapter 12 was added to the Bankruptcy Code in 1986 in response to the farm crisis of the 1980s. Chapter 12 became a permanent part of the Code in 2005. For many reasons, farmers have continued to struggle in the intervening years, causing this chapter to be more relevant than ever. In 2016, farm real estate debt surpassed the 1981 peak.
The Bankruptcy Code directs the trustee in “Subchapter V” small business debtor cases to “facilitate a consensual plan of reorganization.”[1] Earlier this year, the ABI Mediation and Reorganization Committees invited their members to participate in a survey to assess how this mandate has been implemented in practice.
As we exit the pandemic to a new beginning with soon-to-be-“in-person” events, the Mediation Committee is on a mission to join in on the happenings.
Wanted: Mediation Committee Leaders
