Creditors’ Strategic Use of Involuntary Bankruptcy

Generally The purpose of an involuntary bankruptcy, where a company is forced into bankruptcy by its creditors, is to invoke the broad jurisdiction of the Bankruptcy Code over the company’s assets and liabilities.  The benefits include, among other things: Marshalling and preserving the company’s assets; Controlling the use and disposition of the company’s property, through court supervision; […]

Read More

Chapter 15 (Pertaining to International Proceedings) is Alive and Well

Vitro S.A.B. de C.V., a leading manufacturer of glass in Mexico, recently received approval of its restructuring plan under Mexican Insolvency Law (Ley de Concursos Mercantiles), in large part because a federal bankruptcy court in the U.S. halted the efforts of certain bondholders to prosecute a New York lawsuit against Vitro that contravened chapter 15 of the Bankruptcy Code. In July 2011, Vitro […]

Read More

Supreme Court Should Address Credit Bidding Rights

In In re River Road Hotel Partners LLC, 651 F.3d 642 (7th Cir. 2011), the Seventh Circuit Court of Appeals recently upheld the right of secured parties to credit bid their claims in asset sales conducted pursuant to a chapter 11 plan.  This holding is the opposite of the recent holdings by the Third and […]

Read More

Liquidation of Broker-Dealer Related to 8th Largest Bankruptcy

On October 31, 2011, MF Global Holdings Ltd. filed the eigth largest chapter 11 bankruptcy in U.S. History.  MF Global, Inc. was the broker-dealer unit of MF Global Holdings, Ltd. and, by law, could not legally file for bankruptcy or even be included in the bankruptcy of its parent.  As a result, Securities Protection and Investment Corp. (SIPC) moved […]

Read More

High-End Retailer May be Headed to Bankruptcy Again

According to Wall Street, Barneys of New York recently hired Kirkland & Ellis to renegotiate a $200 million revolving loan that matures in September 2012.  This fueled speculation that the retailer would be filing bankruptcy or even possibly closing its doors. This would not be the first time that Barneys has been in bankruptcy.  In 1999, Barneys emerged from […]

Read More