In Spark Factor Design, Inc., et al. v. Hjelmeset (In re Open Medicine Institute, Inc.), No. 22-60017 (9th Cir. Oct. 30, 2023), the Ninth Circuit Court of Appeals recently found that a bankruptcy court has discretion of whether to apply the standards under section 363(b) of the Bankruptcy Code in cases where a debtor’s sale of […]
Read MoreA third-party injunction in a chapter 11 bankruptcy is generally used to protect a non-bankrupt entity from liability that is shared with, or derivative of, a bankrupt entity. Third-party injunctions are difficult to obtain in any bankruptcy setting, because bankruptcy laws are generally intended to protect debtors in bankruptcy, not non-debtor affiliates. Increasingly, however, third-party […]
Read MoreJoining the Fourth, Fifth, Eighth and Ninth Circuit Courts of Appeal, the Eleventh Circuit recently held that new value does not need to remain unpaid in order to support the subsequent new value defense in a preference action. See Kaye v. Blue Bell Creameries, Inc. (In re BFW Liquidation, LLC), Case No. 17-13588, 2018 WL […]
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 MoreOn April 3, 2014, Brookstone Holdings Corporation and its affiliates (“Brookstone” or “Company”), developers and sellers of unique and high quality household products, filed a prenegotiated chapter 11 bankruptcy in Delaware. See In re Brookstone Holdings Corporation, Case No. 14-10752 (Bankr. D. Del.). But, don’t worry. The seller of $4,000 massage chairs does not appear to be going […]
Read MoreThe case of H. Jason Gold v. First Tennessee Bank, N.A. (In re Taneja), Adversary Case No. 10-1225 (Bankr. E.D. Va. July 30 2012), concerns an elaborate fraud perpetrated by a mortgage broker, Financial Mortgage, Inc. (“FMI”), against various warehouse lenders, and a bankruptcy trustee’s later attempt to recover payments made by the mortgage broker to its innocent lenders as fraudulent conveyances. Facts […]
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