The Fundamentals of Bankruptcy and Corporate Reorganization
Michael J. Crames and Herbert S. Edelman
Price: $95.00 376 pages. 1 Hardcover Volume. Index. Published September 1998.
ISBN-13: 978-1-57823-054-9 / ISBN-10: 1-57823-054-3
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| Fundamentals of Bankruptcy & Corporate Reorg. $45.00 |
Introductory Bankruptcy Concepts
A. Structure of the Bankruptcy Code
B. The Bankruptcy Court
C. Basic Bankruptcy Procedure
1. Local Bankruptcy Rules
2. Official Bankruptcy Forms
3. Notice
a. Computation of Time.
b. Excusable Neglect Standard
c. "After Notice and a Hearing"
d. Notice of Presentment
4. Application Versus Motion
5. Protective Orders
6. Procedure for Resolving Bankruptcy Disputes
7. Bankruptcy Appeals
a. Effect of Certain Motions on Time for Appeal
b. Bankruptcy Appellate Panel Versus District Court.
c. Stay Pending Appeal
D. Two Fundamental Policies of Bankruptcy Law
1. The Fresh Start Policy
a. Chapter 7 Cases (liquidation cases)
b. Reorganization Cases
c. The Discharge Injunction
d. Anti-Discrimination
2. Equality of Distribution
a. Chapter 7
b. Chapter 11
E. Avoiding Powers
Chapter 2
Voluntary Petition
A. Who May Be a Debtor?
B. Filing Requirements
C. First Day Orders
1. Wage Order
2. Maintenance of Bank Accounts and Business Forms
3. Extension of Time To File Schedules and Statements
4. DIP Financing and Use of Cash Collateral
5. Retention of Counsel and Other Professionals
a. The Manville Case
(i). What is Ordinary Course of Business
(ii). Definition of Professional Person
b. No Interest Adverse To Estate--Disinterested Persons
(i) The Leslie Fay Case
(a) Retention of Weil Gotshal by Audit Committee
(b) The Chapter 11 Filing
(c) Objections to Weil Gotshal's Interim Compensation
(d) Appointment and Findings of the Examiner
(e) Weil Gotshal's Disclosures
(f) The Bankruptcy Court's Conclusions and Sanctions
6. Joint Administration
D. Formation of Creditors' Committee
E. Exclusivity
F. Observations
1. Harm to the Business
2. Loss of Control
3. Hostile Takeover
4. Administrative Expenses
Chapter 3
Involuntary Petition
A. Benefits of Involuntary Petition
B. Requirements for Involuntary Petition
C. Failure to Sustain Involuntary Petition
1. Bad Faith
2. Attorneys' Fees and Costs
3. Damages
4. Rejection of Advice of Counsel Defense
D. Observation
Chapter 4
Jurisdiction of the Bankruptcy Court
A. Collection of Accounts Receivable
1. Northern Pipeline Decision
2. Importance -- BAFJA
3. Core Proceedings
4. Lack of Jurisdiction
5. Definition of "Under or Arising in," "Core," "Related To," and "Non-core"
6. Effect of Bona Fide Dispute
7. Collection of Account in Bona Fide Dispute - Non-Core
B. Jury Trials
1. Granfinanciera Case
2. Right to a Jury Trial Post-Granfinanciera
3. Bankruptcy Reform Act of 1994
C. Withdrawal of the Reference
1. Discretionary Withdrawal of the Reference
2. Mandatory Withdrawal of the Reference
D. Appellate Jurisdiction
1. Interlocutory Orders
2. Decision of Supreme Court
E. Observation
Chapter 5
Venue
A. Cases Under Title
B. Civil Proceedings
C. Cases Ancillary to Foreign Proceedings
D. Change of Venue
E. State of Incorporation Controversy
Chapter 6
Power of Court
A. Business Necessity First-Day Orders
1. Necessity Must be Real
2. Need v. Desire
B. Supreme Court's Application: Section 105(a) Restrains IRS
C. Injunction
1. Section 105(a) Postconfirmation
2. Observation
D. A Court of Equity: Section 105(a)
E. Termination of Stay
Chapter 7
Automatic Stay
A. Debtor in Possession
B. Automatic Stay's Coverage
1. Violation of Copyright
a. State Court Injunction
b. Chapter 11 Filed Violation of Automatic Stay
2. Creditor Collection
C. Exception to Automatic Stay: Section 1110
Chapter 8
Lender's Participation in Reorganization
A. DIP Financing
B. DIP Facility: Terms
1. Adams Apple Case: Issues Surrounding DIP Facilities
a. Cross-Collateralization
b. Extreme Need for Loan
c. Appeal
d. Mootness of Appeal
e. Good Faith
f. Cross-Collateralization:Necessity for Rehabilitation
C. DIP Facilities: Other Common Controversial Provisions
1. No Attack on Prepitition Loan or Security
2. Automatic Stay Lifted
3. Payment of Lender's Expenses
4. Full Payment of DIP Facility As Condition to Confirmation or Dismissal
D. Observation
Chapter 9
Use, Sale, or Lease of Property
A. Use of Cash Collateral
1. Cash Collateral Litigation
a. Dacon Bolingbrook Case
b. Wise Transportation Case
c. Megan-Racine Case
2. Observation
B. Sale of Property Not in Ordinary Course
1. Good Faith
a. Mootness of Appeal
2. Observation
C. Reclamation of Goods
1. State Law Rights Preserved
2. Application of Section 546(c)
a. Debtor's Insolvency
b. Timely Written Demand
c. Date of Debtor's Receipt of Goods
d. Dispatch Rule
3. Denial of Reclamation
4. Consensual Reclamation
5. Reclamation Right Subject to Right of Good Faith Purchaser
6. Observation
Chapter 10
Executory Contracts And Unexpired Leases
A. What is an "Executory" Contract?
1. Terminated Contract cannot Be Assumed
2. True Sale vs. Lease
B. When Must Contract or Lease be Assumed or Rejected ?
C. Status of Executory Contracts and Unexpired Leases Pre-Assumption or Rejection
1. The Klein Sleep Case
a. Rejection of Assumed Lease:
(i). Damages Entitled to Administrative Priority
(ii). Damages Not Capped
2. Observation
D. Standard For Permitting Assumption or Rejection
1. Assumption Must Be Cum Onere
2. Observation
E. Conditions for Assumption
F. Assumption of Shopping Center Leases.
G. Ipso-Facto Clauses Unenforceable
H. Anti-Assignment Provisions Unenforceable
I. Contracts Which May Not Be Assumed or Assigned.
1. Personal Service Contracts
2. Contracts to Extend Financial Accommodations or Issue Securities
J. Consequences of Rejection
1. Limitation on Damages for Termination of Non-Residential Real Property Leases
2. Employment Contracts
K. Conclusion
Chapter 11
Claims
A. What is a Claim
1. What Constituted a "Claim" Under the Bankruptcy Act
2. Claim Under the Bankruptcy Code
a. Legislative History
b. Definition of Claim
c. Future Claims
(i). The Piper Aircraft Case
(ii). Future Demands - Asbestos Cases
B. How a Claim Becomes an "Allowed" Claim
1. The Bar Date
2. Late Filed Claims
3. Informal Proof of Claim
4. Class Proof of Claim
5. Filing of Claims by Codebtor
C. Disallowed Claims
D. Capped Claims
1. Real Estate Leases
2. Employment Contracts
3. Miscellaneous Principles Re: Capped Claims
E. Estimation -- Contingent or Unliquidated Claims
1. Contingent and Unliquidated Claims Other than Personal Injury Tort or Wrongful Death Claims
2. Estimation of Personal Injury or Wrongful Death Claims
3. Estimation for Voting Purposes
F. Reconsideration of Claims
G. The Most Common Priority Claims
1. Administrative Expenses and Fees
2. Wages, Salaries and Commissions
3. Contribution to Employee Benefit Plans
4. Consumer Deposits
5. Taxes and Customs Duties
6. Subrogation Rights
Chapter 12
Committees
A. Appointment of Committees
1. Flexibility
2. The Dow Corning Case
a. Modifying the Committee Structure
b. The Court's Authority To Alter the Committee Structure
c. Attorney Membership on a Committee
d. Reversal by the District Court
B. Pre-Petition Committee
C. Powers and Duties of Official Committees
D. Suing on Behalf of the Estate
E. Unofficial Committees
F. Observation
Chapter 13
Prepackaged Chapter 11
A. Adequate Disclosure
B. Prepackaging
C. Acceptances
D. In Re Southland Corp.: The Seminal Case
1. Stock Sale
2. Steering Committee Due Diligence
3. Business Deterioration
4. Negotiations: Necessity for Quick Action; Prepackaged Plan
5. Restructuring Plan
6. SEC Compliance
7. Soliciting Acceptances
8. Out-of-Court Solicitation: Insufficient Acceptances
9. Filing Chapter 11
10. Objection to Voting Process
11. Voting Invalidated
12. Voting Renewed
E. Prepackaging Observations: Primary Benefits and Pitfalls
1. Benefits
a. Timing-Minimal Effect on Business-Reduced Fees and Expenses
b. Avoiding Hostile Takeovers
c. Maintaining Control
2. Pitfalls
a. Trade Debt and Continued Credit
b. Possible Involuntary Petition
Chapter 14
Confirmation of Consensual Plan
A. Who May Propose a Plan of Reorganization.
1. Small Businesses
B. Negotiation of a Plan of Reorganization
C. Substantive Consolidation
1. Substantive Consolidation vs. Joint Administration
2. Legal Basis For Substantive Consolidation
3. Standards for Substantive Consolidation
a. D.C. Circuit Test
b. Second Circuit Test
4. Observation. Mandatory and Permissive Plan Provisions
5. Mandatory Provisions
a. Classification
b. Means for Implementation of the Plan
c. Charter Provisions
d. Selection of Officers, Directors or Trustees Under the Plan
2. Discretionary Provisions
3. Plan Structure-Flexibility
E. Confirmation Process
1. Disclosure Statement
2. Voting on the Plan
F. Confirmation Hearing
1. The Plan Must Comply with the Applicable Provisions of Title 11
2. The Plan Proponent Has Complied with the Applicable Provisions of Title 11
3. The Plan Must Be Proposed in Good Faith and Not by Any Means Forbidden by Law
4. Approval of Costs and Expenses
5. Disclosure Of Officers and Directors of the Reorganized Debtor and Insiders to be Employed
6. Regulatory Approvals
7. Best Interests Tests
8. Acceptance of the Plan
9. Priority Claims
10. At Least One Impaired Class of Claims Has Accepted the Plan
11. The Plan is Feasible
12. Payment of Fees to the United States Trustee
13. Retiree Benefits
14. Avoidance of Taxes
15. Confirmation Hearing Involving More Than One Plan
G. Section 105 Injunctions Protecting Non-Debtors
Chapter 15
Confirmation By Cramdown
A. Satisfaction of Section 1129(a) Requirements
1. Unfair Discrimination
2. Fair and Equitable Test
a. "Fair and Equitable" Test-Secured Creditors
(i). Deferred Cash Payments
(1). Section 1111(b) Election
(ii). Sale of Collateral
(iii). Indubitable Equivalent
b. "Fair and Equitable" Test-Unsecured Creditors
c. "Fair and Equitable" Test-Equity Security Holders
B. New Value Exception
C. Observation
Chapter 16
Effect of Confirmation and Postconfirmation Matters
A. The Plan is Binding upon the Parties
B. Property Not Dealt with by the Plan Vests in the Debtor
C. Property Dealt with by the Plan is Free and Clear
D. Discharge of Debtor
E. Implementation of Plan
F. Right to Participate in Distributions
G. Closing the Case
H. Revocation of an Order of Confirmation
Chapter 17
Trustees, Examiners, and Officers of the Court
A. The United States Trustees
B. Examiners and Trustees
C. Role of Debtor in Possession as Compared to Trustee
D. Desirability of Appointing a Trustee
E. Observation
Chapter 18
Avoiding Powers
A. Strong-Arm Powers
1. Hypothetical Lien Creditor
2. Creditor with Execution Returned Unsatisfied
3. Bona Fide Purchaser of Real Estate
4. Rights of Unsecured Creditors
B. Avoidance of Certain Statutory Liens
C. Avoidance of Postpetition Transfers
D. Statute of Limitations
E. Automatic Preservation of Avoided Transfer
F. Sovereign Immunity
Chapter 19
Preferences
A. Elements of a Voidable Preference
1. Establishing the Existence of A Transfer
2. Property of the Debtor
3. For the Benefit of a Creditor
a. Determining Whether the Recipient of a Payment Was a Creditor
b. Benefit to the Creditor
4. On Account of an Antecedent Debt
5. Insolvency
6. Within the Applicable Time Period
a. Determining the Applicable Time Period
b. Determining the Effective Date on Which the Transfer Took Place
(i). Filing or Recordation
(ii). After Acquired Property
(iii). Escrow Funds
(iv). Checks/Wire Transfers
(v). Counting Days
7. Transferee Receives More Than Under Chapter 7
B. Defenses to Avoidance: Statutory Exceptions
1. Contemporaneous Exchange for New Value
2. Transactions in the Ordinary Course of Business
3. Purchase Money Security Interests
4. Subsequent Advance of New Value
5. Security Interests in Inventory or Accounts Receivable
6. Statutory Liens
7. Alimony, Maintenance or Support
8. Small Transfers in Consumer Cases
C. Miscellaneous Preference Issues
1. Liability of Transferee of Avoided Transfer
2. Time Limitations to Commence Actions
Chapter 20
Fraudulent Transfers
A. Development of Fraudulent Transfer Law
B. Elements of a Fraudulent Transfer Action
1. Transfer
a. Transfer Defined
b. Timing of the Transfer
2. Actual Intent To Defraud
a. Direct Evidence
b. Indirect Evidence
3. Constructive Fraudulent Intent
a. Constructive Intent Under The UFCA
b. Constructive Intent Under The UFTA
c. Common Law Causes of Action
4. Insolvency Analysis
a. The Differing Approaches
b. Valuation of Assets
c. Other Financial Impairment
5. Burden of Proof
6. Statutes of Limitation
C. Choice of Law Issues
D. Transferee Liability for Fraudulent Transfers
1. The Bankruptcy Code.
2. The UFTA and the UFCA
3. The Conduit Exception to Transferee Liability
E. Automatic Preservation of Avoided Transfer and Sovereign Immunity
F. Leveraged Buyout
1. What is a Leveraged Buyout ("LBO") ?
G. Foreclosure of Real Property
Index
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