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U.S. Supreme Court Sides With Worker-Creditors in Jevic

Usually workers in bankruptcy cases are debtors, but when employers are in bankruptcy, then their employees can find themselves wearing creditors’ shoes. Frequently, the employers owe money to banks as well, which leads to conflicts between the workers and the banks over the company’s assets and revenue. Typically, the Bankruptcy Code’s system for prioritizing creditors’ . . . → Read More: U.S. Supreme Court Sides With Worker-Creditors in Jevic

What is ‘Equitable Subordination’?

I recently discussed priority claims in New York bankruptcy in the context of the U.S. Supreme Court’s upcoming ruling on the future of “structured dismissals” in chapter 11. The case raises the issue of whether creditors can enter into an agreement, approved by the bankruptcy court, that repays some debtors ahead of others outside the . . . → Read More: What is ‘Equitable Subordination’?

Business Leases: Tricky in Bankruptcy

The Bankruptcy Code doesn’t have a specific chapter addressing business bankruptcies. Debtors who own businesses must instead choose among options that are dispersed throughout the Bankruptcy Code based on their businesses’ and personal circumstances. One such circumstance that can influence the chapter debtor-owners choose is the fate of a lease for business property. For many . . . → Read More: Business Leases: Tricky in Bankruptcy

U.S. Supreme Court to Decide Future of ‘Structured Dismissals’ in Chapter 11

Most New York bankruptcy debtors do not choose chapter 11, but their lives can be affected by chapter 11 bankruptcies filed by others, such as their employers. This is precisely what is happening in a case the U.S. Supreme Court is deciding, Czyzewski v. Jevic Holding Corp., which asks whether bankruptcy courts should allow “structured . . . → Read More: U.S. Supreme Court to Decide Future of ‘Structured Dismissals’ in Chapter 11

Unperfected Liens: Clear Advantage in Chapter 11, Tougher in Chapter 13

I’ve written about how debtors can avoid liens in New York bankruptcy when they impair their exemptions, but trustees can avoid liens against debtors’ assets too, thanks to section 544 of the Bankruptcy Code. Of particular value to some debtors is the trustee’s power to avoid liens that creditors improperly recorded—also described as “unperfected.” It . . . → Read More: Unperfected Liens: Clear Advantage in Chapter 11, Tougher in Chapter 13

Environmentally Contaminated Property in New York Bankruptcy

Real estate in bankruptcy generally concerns debtors, creditors, the trustee, and maybe some tenants. But when that real estate is environmentally contaminated for some reason, then the number of participants swells to include nearby parties who might be affected and environmental regulators. Bankruptcies involving environmental laws are almost always long, complex, and business related. So . . . → Read More: Environmentally Contaminated Property in New York Bankruptcy

So Your Employer Is in Bankruptcy…

Business bankruptcies appear in the news so regularly that it’s easy to ignore them. However, when it’s your employer’s business that files bankruptcy, then it’s your problem. Here are some facts you’ll want to know.

First, it’s necessary to distinguish which chapter the business is filing in. Businesses can’t file in chapter 13, so that . . . → Read More: So Your Employer Is in Bankruptcy…

Capital Gains, Transfer Taxes, and the Bankruptcy Estate

In chapter 7 and chapter 11 New York bankruptcy, a bankruptcy estate is created and then either liquidated or managed for the creditors. In chapter 7, the estate is controlled by the trustee; in chapter 11, it’s managed by the debtor in possession or a trustee if appointed by the bankruptcy court.

It’s easy to . . . → Read More: Capital Gains, Transfer Taxes, and the Bankruptcy Estate

What Are the Benefits of a 0 Percent Chapter 13 Repayment Plan?

Nope, that’s not a typo. There is such a thing as a zero-percent chapter 13 plan. Although, it is a misnomer in that the debtor is actually going to make some payments on the plan. (Otherwise it would be absurd.) Consequently, a zero-percent plan isn’t the opposite of the more commonly known 100 . . . → Read More: What Are the Benefits of a 0 Percent Chapter 13 Repayment Plan?

What Chapter Is Best for a New York Business Bankruptcy?

“Business bankruptcy” isn’t a legal term as there’s no designated chapter for businesses or businesspeople to file bankruptcy in. Thus, the correct question is which chapter is best for businesses and their principals to file in. The answer depends on the structure of the business and the principals’ goals for running it.

. . . → Read More: What Chapter Is Best for a New York Business Bankruptcy?