28th Annual Mid-Atlantic Institute on Bankruptcy and Reorganization Practice Seminar Materials - SALE!

Publication Date: September 2013
Available Formats: Print
Pages: 419

Information

Content Summary:

  • Recent Developments In Bankruptcy Law
  • Ten Tips For Lawyers Advising Closely Held Companies In Financial Distress
  • Do Directors Of Insolvent Or Struggling Corporations Owe Duties To Creditors?
  • Advising Companies In Financial Distress
  • Negotiation Techniques In Bankruptcy
  • Consumer Bankruptcy Tax Issues
  • Tax Considerations In Bankruptcy
  • Issues Relating To 363 Sale Versus Sale Under Chapter 11 Plan
  • Pardon The Bankruptcy: Reaffirmations
  • Pardon The Bankruptcy: Proofs Of Claims And Proposed
  • Changes To The Bankruptcy Rules
  • Pardon The Bankruptcy: Proposed Model Chapter 13 Plan
  • Pardon The Bankruptcy: Divorce Is Not Domestic Bliss In Bankruptcy Court
  • Chapter 11 Practitioners: Ponzi Scheme Bankruptcies
  • Judges’ Panel On Chapter 7, 11, And 13 Issues
  • Panel Discussion Using A Chapter 11 Retail Fact Pattern: Cool Electronics, Inc.

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This comprehensive, stand-alone publication is direct from a September 2013 seminar.

Table of Contents

TABLE OF CONTENTS

RECENT DEVELOPMENTS IN BANKRUPTCY LAW
Hon. Stephen C. St. John
Elizabeth L. Gunn
W. Calvin Smith


TEN TIPS FOR LAWYERS ADVISING CLOSELY HELD
COMPANIES IN FINANCIAL DISTRESS

Michael St. Patrick Baxter

I. Identify Your Client

II. Suggest That the Principal Retain Counsel

III. Create a Special Committee of Disinterested Directors

IV. Engage a Financial Advisor

V. The Bankruptcy Judge Can Be Your Friend

VI. The Creditors Committee Can Be Your Friend Too

VII. Consider Whether an Equity Committee is Appropriate

VIII. Think Hard Before Proposing a Cram-Down Plan as a Strategic Device

IX. Think Hard Before Proposing a Transaction with Insiders

X. Think Hard Before Seeking Insider Releases

DO DIRECTORS OF INSOLVENT OR STRUGGLING CORPORATIONS
OWE DUTIES TO CREDITORS?

Ross C. Reeves

I. Traditional View
    A. Duty of Loyalty
    B. Duty of Care
    C. Duty Owed to Corporation Alone
    
II. Origins of Modern View of Director Liability to Creditors

III. Applying the “Emerging View”
    A. New York
    B. Delaware

IV. Virginia Law on Director Responsibility to Creditors
    A. Statute
    B. Case Law

V. Other Jurisdictions

VI. Practical Observations
    A. Resignation
    B. D&O Insurance
    C. Corporate Hygiene
    D. Liability Issues
    E. Retention of Professionals
    F. Retention of Key Employees and Managers
    G. Reliance on Experts

VII. Some Tough Decisions

ADVISING COMPANIES IN FINANCIAL DISTRESS
Maya P. Yette

I. Resolving Conflicts Between Insiders and the Enterprise

II. Self-Dealing

III. Preparing for Contested Reorganization

NEGOTIATION TECHNIQUES IN BANKRUPTCY

Hon. Frank J. Santoro
Prof. Donald G. Gifford
Prof. Michelle M. Harner


I. Negotiation Hypothetical: Fighting to Save the Business

II. Excerpts, Donald G. Gifford, Legal Negotiation: Theory and Practice

CONSUMER BANKRUPTCY TAX ISSUES
David Cox

I. Basic Rules for Discharging Income Tax
    A. Statutory Framework
    B. 11 USC § 523(a)(1)(A)
    C. 11 USC § 507
    D. Priority Tests
    E. Test #1: The Three Year Rule
    F. Test #2: The 240 Day Rule
    G. § 523 Tests
    H. Test #3: The Two Year Rule
    I. Test #4: The Fraud and Tax Evasion Rule

II. Making Practical Sense of the Tests and Rules
    A. Same Rules 7 v. 13 for Determining if Dischargeable as a
    General Unsecured Claim
    B. Discharging Taxes in Chapter 13 Doesn’t Technically Require
    All Tests to be Passed
    C. Summary Action Chart for the Consumer Debtor
    
III. Understanding the Nuances of the Basic Tests of Dischargeability
and Related Issues
    A. Tax Return Due Date
    B. Multiple Assessments Possible
    C. Interest
    D. Defining a Return for Discharge Purposes
    E. Substitute for Return
    F. Tolling
    G. Non-bankruptcy IRS Collection Statute of Limitations
    H. Tax Liens

IV. Getting the Information; Obtaining Account Transcripts
    A. Complete Client Authorization Form
    B. Obtain a CAF Number
    C. Fax Form to IRS
    D. Call Practitioner Priority Service
    E. Account Transcript and Other Documents
    F. Important IRS Codes

TAX CONSIDERATIONS IN BANKRUPTCY
John Lyons

ISSUES RELATING TO 363 SALE VERSUS SALE UNDER CHAPTER 11 PLAN
Douglas M. Foley
Richard L. Wasserman

Introduction
    A. Sale of a Debtor’s Assets Free and Clear Pursuant to § 363
    B. Sales Under Chapter 11 Plans
    C. Court Authorization

I. Section 1146(a), Piccadilly Cafeterias
    A. Section 1146(a)
    B. Florida Dept. of Revenue v. Piccadilly Cafeterias, Inc.
    C. In re New 118th, Inc.

II. Section 1123(a) - Notwithstanding Otherwise Applicable Non-bankruptcy
Law

III. Section 363(m), Finality, Appeals, Substantial Consummation, and
Mootness
    A. Constitutional Mootness
    B. Equitable Mootness
    C. Statutory Mootness

IV. Sub Rosa Plan Objectives

V. “Gifting,” Provisions Relating to Distribution of Proceeds of Sales
    A. The Gift Doctrine
    B. Gifting Under a Plan and the Absolute Priority Rule
    C. Prior to the Issuance of DISH Network
    D. Gifting as Part of a § 363 Sale

VI. Sale or Other Treatment of Avoidance Actions

VII. Expense and Speed of Section 363 Sale

VIII. Treatment of Secured Creditors

IX. Dealing with Executory Contracts as Part of Sale

X. Free and Clear Sale Orders
    A. Section 363(f)
    B. Bes Enters v. Natanzon
    C. In re L.L. Murphrey Co.
    D. In re Meade

XI. Efficacy of “Structured Dismissals” After 363 Sale

PARDON THE BANKRUPTCY: REAFFIRMATIONS
Richard C. Maxwell

A. Applicable Code Sections and Rule

B. General Considerations for Reaffirmation

C. Form Reaffirmation Agreement

D. Decisions - “Back Door Ride-Through” of Personal Property Prior
to In re Jones

E. In re Jones, 591 F.3d 308 (4th Cir. 2010)

F. Decisions After In re Jones

G. Decisions - “Ride-Through” of Real Property

PARDON THE BANKRUPTCY: PROOFS OF CLAIMS AND PROPOSED
CHANGES TO THE BANKRUPTCY RULES

Hon. Rebecca B. Connelly

Proof of Claim
    A. Deadlines
    B. Documentation
    C. Deficiency Claims

Proposed Revisions to Bankruptcy Rules
    A. Rule 2002
    B. Rule 3002
    C. Rule 3007
    D. Rule 3012
    E. Rule 3015
    F. Rule 4003(d)
    G. Rule 5009
    H. Rule 7001

PARDON THE BANKRUPTCY: PROPOSED MODEL CHAPTER 13 PLAN
Hon. Rebecca B. Connelly

PARDON THE BANKRUPTCY: DIVORCE IS NOT DOMESTIC
BLISS IN BANKRUPTCY COURT

Malissa Lambert Giles

I. Relevant Code Sections

II. So, What is a DSO Really and Why Does it Matter?

III. Recent Reported Cases - DSO Issues

IV. Exceptions to the Automatic Stay

V. Recent Reported Cases - Automatic Stay Issues

CHAPTER 11 PRACTITIONERS: PONZI SCHEME BANKRUPTCIES
Dion W. Hayes
Erika L. Morabito
Paul Nussbaum


I. Introduction
    A. Origin of the Name “Ponzi Scheme”
    B. Frequency of the Ponzi Scheme
    C. What May Not be a Ponzi?

II. Clawback Issues
    A. Importance of the Ponzi Scheme Presumption
    B. Does the Ponzi Scheme Presumption Go Too Far?
    C. Application of the Section 546(e) Safe Harbor to Ponzi
    Transfers
    D. State Law vs. Federal Law

III. Equality of Distribution

IV. Tort Claims
    A. In Pari Delicto Defense
    B. Adverse Interest Exception
    C. Aiding and Abetting Fraud

V. Injunctions and Bar Orders
    A. Typical Bar Situations
    B. Limits of the Automatic Stay

VI. Criminal Forfeiture in the U.S. vs. Stettin Eleventh Circuit Decision

JUDGES’ PANEL ON CHAPTER 7, 11, AND 13 ISSUES
Elizabeth L. Gunn
Roy M. Terry, Jr.


Topic 1: Notice: How Much is Enough?
In re Burston, 12-75188-SCS, docket 21 (Bankr. E.D. Va. April 24, 2013)
    I. Facts
    II. Issue
    III. Holding
    IV. Rationale

Topic 2: Retaining Value Under the Absolute Priority Rule
In re Castleton Plaza, LP, 707 F.3d 821 (7th Cir. Feb. 14, 2013)
    I. Facts
    II. Procedural History
    III. Issue
    IV. Holding
    V. Rule
    VI. Rationale

In re Maharaj, 681 F.3d 558 (4th Cir. 2012)
    I. Facts
    II. Procedural History
    III. Issue
    IV. Holding
    V. Rule
    VI. Rationale

In re Lively, 717 F.3d 406 (5th Cir. Tex. 2013)
    I. Facts
    II. Procedural History
    III. Issue
    IV. Holding
    V. Rationale

Topic 3: Lien Stripping Revisited
In re McNeal, 477 F. A’ppx 562 (11th Cir. 2012)
    I. Facts
    II. Procedural History
    III. Issue
    IV. Holding
    V. Rationale

Topic 5: A Revisit of D&O and Third Party Releases in Chapter 11 Plans

SATURDAY PANEL DISCUSSION USING A CHAPTER 11
RETAIL FACT PATTERN: COOL ELECTRONICS, INC.

Hon. Kevin R. Huennekens
Tyler P. Brown
Douglas M. Foley
Stanley J. Samorajczyk
Lynn L. Tavenner

Authors

Hon. Stephen C. St. John

Elizabeth L. Gunn

W. Calvin Smith

Michael St. Patrick Baxter

Ross C. Reeves

Maya P. Yette

Hon. Frank J. Santoro

Prof. Donald G. Gifford

Prof. Michelle M. Harner

David Cox

John Lyons

Douglas M. Foley

Richard L. Wasserman

Richard C. Maxwell

Hon. Rebecca B. Connelly

Malissa Lambert Giles

Dion W. Hayes

Erika L. Morabito

Paul Nussbaum

Roy M. Terry, Jr.

Hon. Kevin R. Huennekens

Tyler P. Brown

Stanley J. Samorajczyk

Lynn L. Tavenner

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