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 […]
Read MoreIn In re Linn Energy, LLC, 2019 WL 4149481 (5th Cir. Sept. 3, 2019), the Fifth Circuit recently reminded us that if a debt instrument looks like a security and quacks like a security, it likely is a security for purposes of subordination under section 510(b) of the Bankruptcy Code. The implications of characterizing an instrument […]
Read MoreIn November 2011, AMR Corporation, the parent of American Airlines, filed chapter 11 in the United States Bankruptcy Court for the Southern District of New York. Through the bankruptcy, which was hugely successful, AMR was able to shed billions of dollars in operating expenses and become the largest airline in the United States. Part of the […]
Read More“To Lease or Not to Lease?” Whether an equipment lease is characterized as a true lease or a disguised financing in a bankruptcy setting determines what rights and remedies are available to the lessor. For example, if the lease is deemed to be a disguised financing, a debtor may retain possession of the leased property […]
Read MoreThe Fifth Circuit Court of Appeals recently remanded a dismissed adversary proceeding where a former employee of a corporate debtor attempted to assert a class action on behalf of himself and 129 other employees for alleged violations of the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101-2109. See Teta v. Chow (In re TWL Corporation), […]
Read MoreIn In re Heritage Highgate, Inc., No. 11-1889 (3d Cir. March 20, 2012), the Third Circuit Court of Appeals recently determined how bankruptcy courts should value collateral retained by a chapter 11 debtor in order to establish the amount of the creditor’s secured claim pursuant to section 506(a) of the Bankruptcy Code. In doing so, the […]
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