• Professional Fees May Not Be Capped by Standard Carve-Out Provisions

    Secured creditors and debtor-in-possession (DIP) lenders that rely on standard carve-out provisions to limit the impact of bankruptcy professional fees on their collateral would be well-advised to take notice of a U.S. Bankruptcy Court decision from earlier this year.

    John C. Tishler and Tyler N. Layne |April 01, 2017
  • Split Ninth Circuit Requires Default Interest to Cure Default

    A Chapter 11 debtor "cannot nullify a preexisting obligation in a loan agreement to pay post-default interest solely by proposing a cure," held a split panel of the U.S. Court of Appeals for the Ninth Circuit.

    Michael L. Cook |April 01, 2017
  • Expansion of the Barton Doctrine To Unsecured Creditors' Committees

    The U.S. Court of Appeals for the Ninth Circuit recently held in Blixseth v. Brown that under Barton v. Barbour, a plaintiff must obtain a bankruptcy court's permission before commencing a lawsuit in another forum against a member of the committee of unsecured creditors, and that Stern v. Marshall does not preclude bankruptcy courts from adjudicating such claims on the merits.

    Sheryl P. Giugliano |April 01, 2017
  • Make-Whole Mayhem

    Uncertain Treatment of Make-Whole Premiums Upon Bankruptcy-Induced Acceleration and Redemption of Indentures

    Make-whole premiums are essentially prepayment penalties imposed on borrowers when loans are paid off in advance of their maturity dates. These premiums remove the borrowers' incentives to refinance whenever interest rates drop, and provide stability and predictability to the world of secured lending.

    Jeffrey R. Gleit and Nathaniel R.B. Koslof |April 01, 2017
  • Navigating the Bankruptcy Court's Power to Modify A Secured Creditor's Lien

    This article focuses on the impact of section 552 of the Bankruptcy Code, which addresses the effect of a bankruptcy filing on property acquired by the debtor after the filing of the bankruptcy case (referred to as "after-acquired property") and proceeds of pre-bankruptcy collateral.

    David M. Hillman and James T Bentley |April 01, 2017
  • The Chapter 9 Crucible

    Any bankruptcy practitioner, upon first contact with a municipal bankruptcy case, may be shocked by the lack of substantive law to be found in Chapter 9. The dearth of detail has long caused bankruptcy lawyers and courts to turn to the far more substantive provisions of Chapter 11 for practical guidance.

    Ron Oliner and John R. Weiss |April 01, 2017
  • Second Circuit Reverses District Court in Marblegate, Making It Easier to Restructure Bonds Outside of a Chapter 11 Case

    On Jan. 17, 2017, in a closely watched dispute, the Second Circuit issued its long-anticipated decision in Marblegate Asset Management, LLC v. Education Management Finance Corp., construing Section 316(b) narrowly, holding that it only prohibits "non-consensual amendments to an indenture's core payment terms" and does not protect noteholders' practical ability to receive payment.

    Alan R. Glickman, David M. Hillman, Ronald B. Risdon and Minji Reem |March 01, 2017