Tabla de contenidos para December 2022 en ABI Journal

Coordinating Editor Christina Sanfelippo Cozen O’Connor Chicago Coordinating Editor Patrick A. Clisham Engelman Berger, PC Phoenix Coordinating Editor Aaron M. Kaufman Gray Reed; Dallas Christina Sanfelippo is an associate with Cozen O’Connor in Chicago and co-chair of ABI’s Young and New Members Committee. Patrick Clisham is the managing shareholder of Engelman Berger, PC in Phoenix and a member of ABI’s Board of Directors. Aaron Kaufman is a partner with Gray Reed in Dallas. The Fifth Circuit recently ruled that a solvent debtor must pay unsecured creditors the contractual make-whole amount and the agreedupon contractual rate for post-petition interest. While a creditor’s claim for make-whole amounts is the economic equivalent of a claim for unmatured interest and subject to disallowance under § 502‌(b)‌(2), the solvent-debtor exception operates to suspend disallowance of the claim…

J.D. Ivy Alvarez & Marsal Dallas Brian Cumberland Alvarez & Marsal Dallas Allison Hoeinghaus Alvarez & Marsal Dallas J.D. Ivy, Brian Cumberland and Allison Hoeinghaus are managing directors with Alvarez & Marsal’s Compensation and Benefits Practice in Dallas. As the world begins to emerge from the COVID-19 pandemic, businesses have been facing new headwinds from supplychain disruptions, inflation and recessionary fears. These factors could result in an uptick in bankruptcy filings in 2023. Over the last several years, there has been a rise in the use of upfront retention programs in place of, or in combination with, traditional Key Employee Incentive Programs (KEIPs). More recently, the U.S. Government Accountability Office (GAO) has openly called for Congress to step in to curtail this growing trend. These potential restrictions could make it even more difficult…

R. Adam Swick Akerman LLP New York and Austin, Texas Laura Taveras Akerman LLP; Adam Swick is an attorney with Akerman LLP’s Bankruptcy Practice Group in New York and Austin, Texas. He is a 2020 ABI “40 Under 40” honoree and Communications Manager for ABI’s International Committee. Laura Taveras is an associate in the firm’s Dallas office. “[T]he [recognition] process should not end up bogged down in frivolous disputes over recognition when there is little real cause to question the legitimacy of the proceeding. Thusly are compromises crafted, and invariably are they thrust on the courts.”—Hon. Leif M. Clark (ret.)1 Hon. Martin Glenn’s recent opinion in In re Modern Land (China) Co. Ltd. created greater flexibility in the approach to determining a debtor’s “center of main interests” (COMI).2 In this case,…

Chad Husnick Kirkland & Ellis LLP Chicago Tony Simion Alvarez & Marsal Detroit Chad Husnick is a partner in Kirkland & Ellis LLP’s Restructuring Practice Group in Chicago. Drew Maliniak and Mason Zurek are associates in the firm’s New York and Chicago offices, respectively. Tony Simion is a managing director within Alvarez & Marsal’s North American Commercial Restructuring division in Detroit. Editor’s Note: This is the second part of a twopart series. This article continues a discussion of public reporting companies’ obligations under the Securities Exchange Act of 1934 (the “Exchange Act”) during the life cycle of a restructuring under chapter 11. Part 1 of this article2 discussed public reporting companies’ obligations under the Exchange Act before, upon filing and during a chapter 11 case. It emphasized that to the extent possible,…

Carl Mills is counsel in Hughes Hubbard & Reed LLP’s Litigation Group. Karen Chau and Hilary McDonnell are associates in the firm’s Litigation Department. They are based in New York. Editor’s Note: This is the first part of a two-part series. Congress intended the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) to “improve bankruptcy law and practice by restoring personal responsibility and integrity in the bankruptcy system and ensur[ing] that the system is fair for both debtors and creditors.” The “heart of the bill’s consumer bankruptcy reforms” was the “implementation of an income/expense screening mechanism (‘needsbased bankruptcy relief’ or ‘means testing’),” which Congress intended to “ensure that debtors repay creditors the maximum they can afford.”1 Against that backdrop, one “hanging paragraph” in BAPCPA has bedeviled courts and bankruptcy…

Coordinating Editor Hon. Alan S. Trust U.S. Bankruptcy Court (E.D.N.Y.); New York Hon. Alan Trust is chief bankruptcy judge for the Eastern District of New York. If you’re still reading, good. And thank you. But please, do not email me with your answer. I pose the title question somewhat generically because I have entered my fifteenth year of service as a bankruptcy judge. I’ve held nearly 75,000 hearings and signed more than 48,000 orders.2 I’ve heard a lot of fights and disputes. Most of the time, it’s parties disagreeing about the facts and/or applicable law. I get it; that’s absolutely what I am expected, and happy, to resolve. Sometimes, hearings and other disputes (e.g., discovery fights and lawyers not getting along) devolve into bickering and insults. That’s not the most fun…

Andrew E. Glantz Xclaim Inc.; New York Matthew Sedigh Xclaim Inc.; Los Angeles Andrew Glantz is the chief strategy officer of Xclaim Inc. in New York and was previously a senior associate in the bankruptcy group at a global law firm. Matthew Sedigh is the founder and CEO of Xclaim in Los Angeles. Debtors are not the only parties that experience financial distress in chapter 11. Creditors often have their own economic woes that are created or exacerbated by a debtor’s filing. This has been on dramatic display in the proceedings of two cryptocurrency finance platforms: Voyager Digital and Celsius Network.1 Pre-petition depositors, unable to access their accounts and unexpectedly finding themselves as creditors, inundated the courts with pleas for immediate relief, many in dire financial straits.2 While the presiding…

Cullen and Dykman LLP has formed the firm’s new Loan Workout Practice Group, which will be led by Thomas R. Slome and Bonnie Pollack. Mr. Slome has been an ABI member since 2021, and Ms. Pollack has been an ABI member since 2013. They are based in Garden City, N.Y. Ellen E. Oberwetter of Williams & Connolly LLP (Washington, D.C.) has been selected to DCA Live’s list of Emerging Women Leaders in Law (Private Practice) for 2022. She has been an ABI member since 2013. Jennifer M. Meyerowitz has joined SAK Management Services, LLC in Riverwoods, Ill., as the company’s chief growth officer and general counsel. She has been an ABI member since 2005 and is a member of ABI’s Board of Directors. Scott A. Stichter of Stichter, Riedel, Blain &…

August (partial list) Nicholas S. Olivencia Kirkland & Ellis LLP New York Priya Patel Chicago-Kent College of Law Old Hickory, Tenn. Shawn Petsch University of Idaho Boise, Idaho Garrett Pratt IRS Office of Chief Counsel Kansas City, Mo. Annie J. Rago U.S. Bankruptcy Court (N.D. W.Va.) Wheeling, W.Va. Sonal Rastogi Emory University School of Law Atlanta Ralph M. Reisinger Reisinger Law Firm PLLC Grand Rapids, Mich. James Risener Kilpatrick Townsend & Stockton LLP Atlanta Alan J. Roberts Grant Thornton LLP St. Helier, Channel Islands Brian A. Roman The Claro Group, LLC Houston Sari Jaye Rosenfeld Goodwin Procter LLP New York Alexandra Rossetti U.S. Bankruptcy Court (W.D. Tex.) San Antonio Charles M. Rubio Parkins & Rubio LLP Houston Hailey V. Rutledge Perkins Coie LLP Chicago Jeff Sanches, Jr. U.S. Bankruptcy Court…

The rapid growth of the cryptocurrency market and digital asset-trading platforms have been accompanied by increasing regulatory scrutiny and legislative concerns.1 Forty-two bills were introduced in the 117th Congress containing the word “cryptocurrency,” and the Biden administration and regulatory agencies have continued working to construct parameters for protecting consumers and financial institutions, while not stifling the nascent industry. This article will provide a brief overview of the top legislative and administration proposals released over the past year, insights into how the proposals might be of importance to practitioners, and prospects on future cryptocurrency legislation. A key starting point regarding cryptocurrency proposals occurred this year on March 9 when President Joe Biden issued Executive Order 14067, “Ensuring Responsible Development of Digital Assets.”2 The Executive Order acknowledged that some digital asset-trading platforms…

Coordinating Editor Karen Cordry National Association of Attorneys General Washington, D.C. Fred Rudzik is chief bankruptcy counsel and Kristian Oldham is an attorney with the Florida Department of Revenue in Tallahassee, Fla. Karen Cordry is bankruptcy counsel for the National Association of Attorneys General in Washington, D.C. “[O]ur sovereign immunity decisions have not followed a straight line.” — Justice Elena Kagan’s concurrence in Torres v. Tex. Dep’t of Public Safety2 Sovereign immunity is a doctrine that long predates the U.S. Constitution. As such, one might think its interpretation had achieved a degree of stability, but the last few decades have seen a number of large swings in its reach — and bankruptcy has been an instrumental part of those changes. The U.S. Supreme Court’s most recent decisions suggest yet another major…

George P. Angelich ArentFox Schiff LLP New York Justin A. Kesselman ArentFox Schiff LLP Boston Matthew R. Bentley ArentFox Schiff LLP New York George Angelich is a partner, and Matthew Bentley is an associate, with ArentFox Schiff LLP’s Bankruptcy and Financial Restructuring Group in New York. Justin Kesselman is a partner in the firm’s Boston office. Nearly 17 percent of emerging-market sovereign debt is trading at distressed levels, comprising approximately $237 billion of the $1.7 trillion owed by governments of developing countries to foreign lenders.1 This magnitude of sovereign debt trading is indicative of economic unrest in the developing world and the resulting allocation of limited resources to food, medicine and fuel rather than bond coupons. This paradigm has emerged prominently in Sri Lanka over the past several months, as the nation defaulted…

Coordinating Editor Scott J. Bogucki Gleichenhaus, Marchese & Weishaar, PC; Buffalo, N.Y. Scott Bogucki is an attorney with Gleichenhaus, Marchese & Weishaar, PC in Buffalo, N.Y. His practice includes creditors’ rights and complex bankruptcy litigation, as well as defending borrowers in MCA transactions in both bankruptcy and state court. Transactions involving the merchant cash advance (MCA) industry are routinely challenged on the basis that they should be characterized as secured loans, rather than the sale of receivables. An MCA transaction provides a business with a portfolio of receivables and a need for quick cash with the ability to monetize those accounts to sustain its operations. Traditionally, a business in this position would either sell its receivables or use them as collateral for a secured loan. On its face, an MCA agreement…

Douglas S. Mintz Schulte, Roth & Zabel LLP; Washington, D.C. Ned S. Schodek Schulte, Roth & Zabel LLP; New York Peter J. Amend Schulte, Roth & Zabel LLP; New York Douglas Mintz is a partner and co-chair of Schulte, Roth & Zabel LLP’s Business Reorganization Group in Washington, D.C. Ned Schodek is a partner, and Peter Amend is special counsel, in the firm’s New York office. The unique circumstances of the last few years (and hard-charging investors) have forced many borrowers without adequate near-term liquidity to engage in more creative and aggressive liability-management transactions. These transactions have often taken the form of “uptiering” financings. While borrowers have historically engaged in these types of transactions, parties have pursued these strategies with greater vigor in recent years, causing some observers to call this an era…

Stuart M. Riback Wilk Auslander LLP New York Stuart Riback is a partner with Wilk Auslander LLP in New York. His practice includes commercial, financial, crossborder, intellectual property and creditors’ rights matters. Congress enacted § 365‌(n) of the Bankruptcy Code in response to the Fourth Circuit’s 1985 decision in Lubrizol Enterprises Inc. v. Richmond Metal Finishers Inc.1 Lubrizol held that the technology license at issue was executory and approved its rejection, but most importantly, it held that rejection operated to terminate the licensee’s right to continue using the licensed intellectual property. Section 365‌(n), enacted three years later, ameliorated some of the harshness of this result. Under § 365‌(n), if the court approves rejection of a license of “intellectual property” (IP), as defined in the Code, the licensee may elect to retain its…

ABI President Hon. Kevin J. Carey (ret.) Hogan Lovells US LLP Philadelphia Hon. Kevin Carey is senior counsel with Hogan Lovells US LLP in Philadelphia and a retired judge for the U.S. Bankruptcy Court for the District of Delaware. He previously served as ABI’s Vice President-Membership. Since my last column, I have been busy carrying the ABI banner both at home and abroad. In October, I was honored to be a part of ABI’s International Insolvency & Restructuring Symposium in London and enjoyed spending time with everyone, especially those who attended this event for the first time in its 17-year history. I am grateful to the program co-chairs, Ian Williams of Williams Consulting International (London), Al Togut of Togut, Segal & Segal LLP (New York) and ABI Vice President-International Stephen…

Hon. Michael G. Williamson Hon. Michael G. Williamson passed away on Nov. 3, 2022. For more than two decades, Judge Williamson — a brilliant writer and thinker with a keen sense of humor — served the U.S. Bankruptcy Court for the Middle District of Florida with honor and distinction, including as its chief judge from 2015-19. A 1976 graduate of Georgetown University Law Center, he practiced law in Orlando, Fla., for two decades. As an attorney with a statewide chapter 11 practice, he was known for his professionalism and civility. In 2000, the Eleventh Circuit Court of Appeals appointed Judge Williamson to the bankruptcy bench in Tampa, Fla. As a judge, he fulfilled his vocation as a writer, speaker and educator. During his 22 years on the bench, Judge Williamson authored more…

AO Director Updates Congress on Progress in Case-Management Technology Modernization, Concerns with Proposals In a letter1 to Senate Judiciary Chair Richard Durbin (D-Ill.) and House Judiciary Chair Jerrold Nadler (D-N.Y.), Judge Roslynn Mauskopf, the director of the Administrative Office of the U.S. Courts (AOUSC), detailed efforts underway to modernize the Judiciary’s electronic case-management system, including replacing Public Access to Court Electronic Records (PACER). The top-to-bottom modernization of the Judiciary’s case-management system will “significantly improve our cybersecurity posture and benefit not just the courts, but also litigants and the public who seek to access court records,” Judge Mauskopf wrote. One of the first steps in the project will be replacing the current version of PACER with unified search functionality and other improvements aimed at making records searches easier and more intuitive…

Adam Back Stoll Keenon Ogden PLLC; Lexington, Ky. Adam Back is a member of Stoll Keenon Ogden PLLC in Lexington, Ky., and his practice includes financial restructuring, bankruptcy and commercial litigation. As the role of cryptocurrency continues to evolve in the commercial world, the Uniform Law Commission (ULC) and the American Law Institute (ALI), the sponsors of the Uniform Commercial Code (UCC), have taken thoughtful, meaningful action to address a key question: How can an interest in cryptocurrency be created and perfected in a uniform way as cryptocurrency’s role on the global stage expands? Cryptocurrency is a type of virtual currency that tracks transactions on a distributed ledger, such as a blockchain, via cryptography.1 Bitcoin, Ether and Litecoin are types of cryptocurrency. Approximately 16 percent of American adults have used or…

Coordinating Editor Leslie A. Berkoff Moritt Hock & Hamroff LLP; New York Leslie Berkoff is a partner with Moritt Hock & Hamroff LLP in New York and chairs the firm’s Dispute Resolution Practice Group. She serves as a private and panel mediator for bankruptcy courts nationwide and the New York state courts. The United Nations Convention on International Settlement Agreements Resulting from Mediation, informally known as the “Singapore Mediation Convention” or the “Convention,” originally adopted by the United Nations General Assembly in December 2018, applies to settlement agreements resulting from the mediation of international (cross-border) disputes. The Convention’s goal is to promote mediation as a viable alternative to the litigation of cross-border trade disputes by creating an effective process for enforcing a resulting settlement agreement.1 The intent is to provide parties…

Coordinating Editor Una M. O’Boyle U.S. Bankruptcy Court (D. Del.); Wilmington Una O’Boyle is the clerk of the U.S. Bankruptcy Court for the District of Delaware in Wilmington and the former chief deputy of the U.S. Bankruptcy Court for the Southern District of New York. Editor’s Note: Need easy access to the Bankruptcy Code and Rules? Be sure to bookmark ABI’s Interactive Code and Rules website at law.abi.org. Several new amendments to the Federal Rules of Bankruptcy Procedure are set to become effective Dec. 1, 2022. Twelve rules were amended and one new rule was created in response to the Small Business Reorganization Act of 2019 (SBRA)1 (Rules 1007, 1020, 2009, 2012, 2015, 3010, 3011, 3014, 3016, 3017.1, 3018, 3019 and new Rule 3017.2). Four additional rules (Rules 3002‌(c)‌(6), 5005, 7004 and…

Bruce S. Nathan Lowenstein Sandler LLP New York Scott Cargill Lowenstein Sandler LLP Roseland, N.J. Bruce Nathan is a partner in Lowenstein Sandler LLP’s Bankruptcy, Financial Reorganization and Creditors’ Rights Group in New York and a past member of ABI’s Board of Directors. Scott Cargill is Of Counsel in the firm’s Roseland, N.J., office. A recent decision of the U.S. Court of Appeals for the Eleventh Circuit has potential farreaching implications concerning the extent of the new-value defense to preference liability. Whether a creditor can include, as part of its newvalue defense, invoices for goods sold on credit terms prior to a debtor’s bankruptcy filing that are subsequently paid by a debtor or trustee post-petition has divided courts across the country for more than a decade. In Auriga Polymers Inc. v. PMCM2…

Andrea M. Chase Spencer Fane LLP Kansas City, Mo. Eric L. Johnson Spencer Fane LLP Kansas City, Mo. James A. Lodoen Spencer Fane LLP Minneapolis Andrea Chase and Eric Johnson are partners with Spencer Fane LLP in Kansas City, Mo. Ms. Chase is education director of ABI’s Secured Credit Committee and a 2021 ABI “40 Under 40” honoree. Mr. Johnson is a member of ABI’s Board of Directors. Jim Lodoen is a partner in the firm’s Minneapolis office. The agriculture industry is a significant part of the U.S. economy. Unsurprisingly, there are many Bankruptcy Code provisions devoted to the agriculture industry. While much of the attention has been focused on chapter 12 and its protection of the distressed family farmer, it is not the only Code provision meant to protect…