Maybe We Should Call It Cryptic Currency?

Notwithstanding that cryptocurrency is generally in the cloud, crypto purists will say that cryptocurrency is as valuable as dollar bills.  However, the recent bankruptcy filings of five major crypto companies, including Celcius Network LLC (a lender) and FTX Trading Ltd. (an exchange), may bring to light the real nature of cryptocurrency; whether it’s an investment, […]

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Ultra Petroleum Redux: Make-Whole Provisions and Solvent-Debtor Exception Remain Intact in the Southern District of Texas

Introduction Since the March 2019 CRR article on the Ultra Petroleum case, entitled Fifth Circuit Holds that Chapter 11 Plan Does Not “Impair” Claimants by Denying Make-Whole Rights and Contractual Interest, a fair amount of activity has occurred in the case.  While the Fifth Circuit’s original opinion, Ultra Petroleum Corp. v. Ad Hoc Comm. of Unsecured […]

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Fifth Circuit Holds that a Constructive Trust is a Judicial Remedy Under Texas Law that is not Automatically Created by Contract

In BBX Operating, L.L.C. v. Bank of America, N.A. (In re Connect Transport, L.L.C.), No. 19-11050 (5th Cir. August 11, 2020), the Fifth Circuit Court of Appeals recently upheld the dismissal of a conversion claim as a matter of law, because the plaintiff failed to sufficiently plead ownership of the purportedly converted funds in its complaint, […]

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Private Equity Firm and Owner Face Potential WARN Act Liability in Portfolio Companies’ Chapter 7 Bankruptcies

In Shameeka Ien v. TransCare Corp., et al. (In re TransCare Corp.), Case No. 16-10407, Adv. P. No. 16-01033 (Bankr. S.D.N.Y. May 7, 2020) [D.I. 157], the Bankruptcy Court for the Southern District of New York recently refused to dismiss WARN Act claims against Patriarch Partners, LLC, private equity firm (“PE Firm“), and its owner, […]

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Does a Claim Objection Under Section 502(d) Survive the Transfer of the Claim by the Original Claimant?

The Southern District of New York recently reminded us in In re Firestar Diamond, Inc., et al., Case No. 18-10509 (Bankr. S.D.N.Y. April 22, 2019) (SHL) [Dkt. No. 1482] that equitable principles in bankruptcy often do not match those outside of bankruptcy. Indeed, bankruptcy decisions often place emphasis on equality of treatment amongst all creditors […]

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Court Denies the Filing of Class Action Proof of Claim in PG&E’s Bankruptcy

Bankruptcy and class actions each establish elaborate procedures and provide a convenient forum to resolve numerous claims against one or more defendants, in an efficient manner.  However, while a class action focuses on providing adequate representation to claimants with similar claims, bankruptcy focuses on enabling an insolvent company to reorganize.  The two goals do not […]

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