Visit our website | Click here to view online

Vol 15, Num 3 l June 2016

Business Reorganization An ABI Committee Newsletter - Spnsored by The Wall Street Journal

► In This Issue:

Caesars Entertainment: The Seventh Circuit Expands the Reach of § 105


Peter C. Blain
Reinhart Boerner
Van Deuren, s.c.

The “automatic stay” is one of the most fundamental debtor protections under the Bankruptcy Code. On rare occasions, courts have used their equitable powers under Bankruptcy Code § 105 to enjoin actions against nondebtors, usually arising from the same litigation plaguing the debtor. In late 2015, the Seventh Circuit Court of Appeals decided Caesars Entertainment Operating Co. v. BOFK, N.A. The decision, written by Judge Richard Posner, establishes a broad and flexible standard to be used by bankruptcy courts in deciding whether to enjoin actions against nondebtors, even where there is separate litigation involving different parties asserting different causes of action.
» Read More

Bankruptcy Schedules: Reliable Information Provided Under Oath, Right? Maybe Not…


Patricia B. Fugée
FisherBroyles, LLP; Cleveland/Toledo, OH

A debtor’s bankruptcy schedules of assets and liabilities (Schedules) and statement of financial affairs (SOFA) are filed early in a chapter 11 case and are supposed to contain an accurate and complete listing of all assets and liabilities, signed by a responsible party under oath. The Schedules and SOFA are often the first things to review when a case is filed, as they provide important information regarding the value of assets and whether identified claims are disputed. A recent trend has developed, however, whereby debtors file “global notes” with their Schedules and SOFA, in which they make various disclaimers about the reliability of the information and attempt to avoid having any disclosed information used for any purpose. Perhaps the most concerning thing about these global notes is that they have rarely been challenged, despite the fact that their effect is to arguably render the Schedules and SOFA unreliable.
» Read More

State Courts Re-Balance Fraudulent Transfer Litigation and Ponzi Scheme Presumptions


Jesse T. Moore
Dykema Cox Smith
Austin, Texas

The basic elements and defenses for fraudulent-transfer claims have a certain elegant balance when combined (see the table). For constructively fraudulent transfers by an insolvent transferor, a defendant who provides reasonably equivalent value will not be held liable. In the rare case of a fraudulent-but-solvent transferor, the transferee who acted in good faith and provided some value will not be held liable. For a fraudulent transfer by an insolvent transferor, the transferee must act in good faith and provide reasonably equivalent value to avoid both constructive and actual fraudulent transfer liability. This seems to balance the interests of innocent transferees and the competing interests of other innocent creditors.
» Read More

Southeast Bankruptcy Workshop


Southeast Bankruptcy Workshop

66 Canal Center Plaza, Suite 600, Alexandria, VA 22314 |
Tel. (703)-739-0800
Follow ABI on Twitter Follow ABI on Facebook Follow ABI on Linkedin

Copyright © 2016 American Bankruptcy Institute.