Tabla de contenidos para January 2023 en ABI Journal

Aaron Kaufman is a partner with Gray Reed in Dallas. Bradley Pack is a shareholder with Engelman Berger, PC in Phoenix. Christina Sanfelippo is an associate with Cozen O’Connor in Chicago and co-chair of ABI’s Young and New Members Committee. Failure to Timely Object to Debtors’ Claim of Exemption in “100 Percent of FMV” of Property Removes the Property from the Estate In In re Masingale, 1 the U.S. Bankruptcy Appellate Panel (BAP) of the Ninth Circuit held that where no timely objections had been filed to the debtors’ listing of 100 percent of fair market value (FMV) of their homestead as exempt, the entire homestead was removed from the bankruptcy estate, despite the fact that the applicable statute limited the exemption to a maximum of $45,950. However, the court…

Jeanne Goche is CEO and president of Solutions in Health Care Management in West Branch, Iowa. She has worked in all health industry sectors with an emphasis in provider operations and finance, and the last decade in restructuring and stabilizing troubled health care organizations. In any distressed-business situation, an accurate 13-week cash-flow analysis is essential.1 Getting reasonably accurate cash projections for a distressed hospital is difficult,2 yet working toward accuracy by mending gaps in financial functions is not only a worthy endeavor per se, it can also result in increased cash and, subsequently, additional options and time for bankruptcy professionals.3 Complicated financial operations lead to difficulties in projecting a correct cash flow for a hospital.4 A major complication in health care is that virtually all hospital staff members take part…

Hon. Cecelia Morris began her official tour of duty as U.S. bankruptcy judge for the Southern District of New York on July 1, 2000, and served as chief judge from March 1, 2012, until March 1, 2022. This article’s purpose is simple:2 to remind lawyers, regardless of the dollar amount or significance of the case, of the basic decorum and expectations for presentations to be heard by the court, whether in person, by video or by telephone. By its very nature, presentation requires thinking ahead. Beginning with client intake, you need to be thinking about options for the filing and form a plan for how to handle any issues on the horizon. No matter how large or small the case, a skilled lawyer, no matter the party you are representing,…

Laura Day DelCotto has practiced law for more than 35 years in Kentucky, the first half of her career doing primarily secured lender and lender-liability work at one of the larger Kentucky-based law firms, and the second half doing mostly chapter 11 debtor and committee work at the six-attorney firm she co-founded in 2003. In this profession, words matter. Our ethics rules remind us repeatedly of our obligations around civility and professionalism, including our need to encourage public support and confidence in the judicial system. Rolling into 2023, words matter more than ever. As bankruptcy professionals watching the headwinds of global and local economic turmoil, we have a unique stage on which to either help or hurt “public confidence” in our specific system of processes and remedies. When we each…

Ross Switkes is Of Counsel with Sherman, Silverstein, Kohl, Rose & Podolsky, PA in Moorestown, N.J., and a member of the firm’s Bankruptcy, Insolvency and Workout Department. A “363 sale” is a term that many bank-ruptcy professionals encounter early in their careers. Additional terms will typically follow, such as “stalking-horse bidder,” “bidding procedures” and “free-and-clear order.” A new practitioner might find these phrases to be novel. The purpose of this article is to place these and other similar terms into context through a basic overview of a proposed asset sale by a chapter 11 debtor in possession (DIP) to a stalking-horse bidder under § 363 of the Bankruptcy Code. Section 363 Sale: Basic Process Overview A common way for a DIP to generate funds for the benefit of creditors is…

Mahlon Mowrer is an attorney with The Belmont Firm in Arlington, Va., and he represents consumer and corporate debtors in the Washington, D.C., metro area. The 117th Congress is in its twilight, and the 118th Congress will mire in the narrow partisan majorities splitting its chambers and the inevitable political divides leading into the 2024 election. So imminent legislative updates impacting bankruptcy seem — at best — distant. But bankruptcy bills often echo. The sleepy winter months seem to be the perfect time to revisit the twice-rejected Consumer Bankruptcy Reform Act (CBRA),1 which is sure to be reintroduced as law-makers turn their focus to economic relief for Main Street as the 2024 races heat up. The CBRA was first introduced on Dec. 8, 2020,2 in the 116th Congress by Sen.…

Kevin Jacobs is the national tax office practice leader and a managing director with Alvarez & Marsal Taxand, LLC in Washington, D.C. Anthony Sexton is a tax partner with Kirkland & Ellis LLP in Chicago. Andrey Ulyanenko is a senior director with Alvarez & Marsal Taxand, LLC in Miami. The unprecedented lull in restructuring activity that began suddenly after the COVID-19 wave appears to have come to an abrupt end. As companies navigate insolvency and restructuring plans, they may be surprised to learn that they could be hit with an unexpected tax bill under the new “book minimum tax” regime (BMT) that was passed as part of the Inflation Reduction Act of 2022 and came into effect at the beginning of this year.2 The BMT was promulgated to make large…

Michael Cooley is a partner with Reed Smith LLP in Dallas, and is board certified in business bankruptcy law by the American Board of Certification. The second shoe has dropped in the case of Ultra Petroleum, which has yielded another highly anticipated decision from the Fifth Circuit, as creditors fight to collect some $387 million in makewhole (or prepayment) premiums and post-petition default interest. In the parties’ first trip to New Orleans, the Fifth Circuit held that impairment under § 1124‌(1) looks to whether the plan itself — and not the Bankruptcy Code — impacts a creditor’s rights,1 and remanded the matter back to the bankruptcy court to consider whether the Code itself disallowed the plaintiff’s claims for payment of the makewhole (or prepayment) premium2 and post-petition default interest.3 On…

Brendan Gage is a corporate associate focusing on special situations transactions with Goulston & Storrs PC in Boston. The claims and noticing agent (the “claims agent”) is central to the administration of large business bankruptcy cases filed in the U.S. As the name implies, this for-profit third party is retained on behalf of the bankruptcy estate to render the often-time-consuming administerial services related to noticing, claims management and public communications that the clerk of the bankruptcy court would otherwise need to provide.2 Always adapting its services to incorporate technological advances and to respond to the increasing sophistication of stakeholders in a bankruptcy,3 little reported case law exists on what activities the claims agent cannot provide. The issue is further complicated by the debtor’s ability to retain the claims agent to…

Hon. Allan Gropper was a bankruptcy judge for the Southern District of New York from 2000-15. He is currently an arbitrator, mediator and expert witness, as well as the author of several papers and a frequent lecturer on cross-border insolvency issues. Recently, Rochelle’s Daily Wire reported on two cross-border decisions in the bankruptcy courts: one recognizing and one refusing to recognize the representative of a foreign insolvency proceeding under chapter 15 of the Bankruptcy Code.1 In the first decision, In re Modern Land (China) Co. Ltd., Hon. Martin Glenn of the U.S. Bankruptcy Court of the Southern District of New York recognized the foreign representative of a Cayman Islands holding company incorporated in the Cayman Islands with subsidiaries that had operations primarily in the People’s Republic of China.2 The chapter…

Kathleen DiSanto is a shareholder with Bush Ross, PA in Tampa, Fla., and is practice group leader of the firm’s Bankruptcy Department. Luis Rivera is a shareholder with GrayRobinson, PA in Fort Myers, Fla. He is also a chapter 7 trustee and a 2017 ABI “40 Under 40” honoree. Some say merchant cash advances provide a creative solution to a small business’s cash-flow problems. Others view them as a form of predatory lending, tantamount to fraudulent and usurious loans. Like many things, the truth is probably somewhere in between. What Is a Merchant Cash Advance? Merchant cash advances gained popularity following the Great Recession, but have existed for more than 20 years.2 They are often marketed to small businesses that need working capital, but are more susceptible to disruptions in…

SAK Management Services is now SAK Healthcare. Suzanne Koenig has been an ABI member since 2000, and Jennifer M. Meyerowitz has been an ABI member since 2005. They are both members of ABI’s Board of Directors. Stephanie Crane Lieb of Trenam Law (Tampa, Fla.) received a “Member of the Year” award from the Business Law Section of the Florida Bar. She has been an ABI member since 2007 and is a 2018 ABI “40 Under 40” honoree. Hon. Elisabetta G. Gasparini has joined the U.S. Bankruptcy Court for the District of South Carolina (Charleston, S.C.). She was previously a trial attorney with the Office of the U.S. Trustee in Region 4 (2012-22) and Region 2 (2009-12). She has been an ABI member since 2022. Christian G. Haman of Dal Lago…

FTX Collapse Draws Indictment of Fraud Against Former CEO by U.S. Prosecutors, Ire of Congress A federal grand jury in Manhattan returned an indictment on Dec. 13 charging FTX founder and former CEO Samuel Bankman-Fried with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the Federal Election Commission and commit campaign finance violations. The charges in the indictment arise from an alleged wide-ranging scheme by Bankman-Fried to misappropriate billions of dollars of customer funds deposited with FTX, the international cryptocurrency exchange founded by Bankman-Fried, and mislead investors and lenders to FTX and to Alameda Research, the cryptocurrency hedge fund also founded by Bankman-Fried. He was arrested on Dec. 12 in the Bahamas…

Vincent Roldan and Jeffrey Rosenthal are partners with Mandelbaum Barrett PC in Roseland, N.J. In August 2022, the court in the Aearo Technologies bankruptcy case denied the debtor’s motion to extend the automatic stay to protect its nondebtor parent, 3M, from mounting mass tort litigation.1 The Seventh Circuit Court of Appeals recently granted a petition by the debtor for a direct appeal. Interestingly, the Third Circuit will be considering a similar appeal in the LTL Management bankruptcy case, but in that case, the bankruptcy court stayed mass tort litigation against the nondebtor parent, Johnson & Johnson (J&J).2 As pointed out by some commentators, “The very future of mass tort litigation may depend on what the Seventh and Third Circuits decide.”3 Circuit courts may hear direct appeals if the bankruptcy court’s…

Camisha Simmons is the founder and managing member of Simmons Legal PLLC in Dallas. A common dispute arising in bankruptcy is what value to attribute to a debtor’s assets, and the dispute is often litigated. In addition, the litigating parties introduce competing valuations into evidence. The court then usually ascribes a value to the asset after weighing and considering the competing expert valuations and related evidence. In recent litigation in the chapter 11 case of In re Brickchurch Enterprises Inc.,2 Hon. Alan S. Trust decided not to determine value. Instead, he noted that he would let the market speak for itself, explaining: As the parties recognized during argument, and including, specifically, in the affidavit of [Geoffrey] Gifkins, market value is determined by the meeting of the minds between [the] seller…

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 second 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…

David Leibowitz is the founder of the Law Offices of David P. Leibowitz, LLC in Chicago and co-chaired CPEX. He is also a past member of ABI’s Board of Directors. In the spring of 2021, we were isolated and in the throes of the COVID-19 pandemic. Courts were closed. Professional meetings were impossible. Bankruptcy in general and consumer bankruptcy in particular had declined drastically. COVID-19 forced all of us into survival mode, both personally and professionally. Many of us had experienced death and serious illness among our friends and families. As the pandemic has receded, we may have forgotten just how dark that time was. So, when ABI Chief Strategy and Innovation Officer Karim Guirguis called me out of the blue with a crazy idea, I was taken aback. Karim…

Chuck Carroll is a senior managing director with FTI Consulting, Inc. in Dallas. John Yozzo is a managing director in the firm’s New York office. Major breakthroughs this century in the ways that oil and gas can be extracted from the ground should have been an unmitigated success story for the U.S. energy sector, but they have instead been a mixed blessing: They have created enormous wealth while also producing an inordinate number of business failures, much of them self-inflicted. The energy sector has long been known as a boom-and-bust industry whose pronounced cycles are mostly attributable to its dependence on volatile commodity prices that are determined in global markets and outside the control or influence of any large energy-producers other than the sovereign-owned oil-producing nations. Whether it is Exxon…

Richard “Dick” Lieb, 92, of Cooley LLP passed away Nov. 3, 2022, after a lengthy illness. According to a memoriam published by his firm, he was one of New York’s leading bankruptcy lawyers, a mentor to young attorneys and a professor of bankruptcy law. He became a Cooley partner in August 2006, following a merger with his firm, Kronish Lieb Weiner & Hellman. Mr. Lieb co-founded Kronish Lieb in 1958 with Herbert Kronish and led its bankruptcy group. He was recognized for his legal acumen as a corporate insolvency problem-solver and tenacious litigator. Mr. Lieb grew up in Far Rockaway, Queens, and he loved the law from a young age. At about age 10, he purchased a neighbor’s rowboat that had hidden damage. When it sunk, his father sued the…

September (partial list) Nora McGuffey U.S. Bankruptcy Court (D. Del.) Wilmington, Del. Doug Mintz Schulte Roth & Zabel LLP Washington, D.C. Hitesh Mundhra IICA Varanasi, Uttar Pradesh, India Wisam Naoum Federal Communications Commission Washington, D.C. Christine Barilla Nell U.S. Small Business Administration Washington, D.C. Nico L. Nesenoff Hilco Real Estate Tampa, Fla. Abigail V. O’Brient Mintz, Levin, Cohn, Ferris, et al. Los Angeles Shawn O’Conner HMP Nashville, Tenn. Andrew O’Keefe U.S. Bankruptcy Court (D. Ariz.) Phoenix Karen Edwards Onyeije Federal Communications Commission Washington, D.C. John F. O’Rourke U.S. Bankruptcy Court (S.D.N.Y.) New York Michael Pappas Stinson LLP Kansas City, Mo. Thomas C. Pearson University of Hawaii at Manoa Honolulu Tara Peramatukorn Squire Patton Boggs New York Anne M. Peterson HSBC Bank USA, National Association Depew, N.Y. Talya Pinto Cristol Bankruptcy…

2021-22 Robert P. Reynolds 2020-21 Hon. Barbara J. Houser (ret.) 2019-20 Alane A. Becket 2018-19 Edward T. Gavin 2017-18 Hon. Eugene R. Wedoff (ret.) 2016-17 Jeffrey N. Pomerantz 2015-16 James Patrick Shea 2014-15 Brian L. Shaw 2013-14 Patricia A. Redmond 2012-13 James T. Markus 2011-12 Geoffrey L. Berman 2010-11 Melissa S. Kibler 2009-10 Robert J. Keach 2008-09 John W. Ames 2007-08 Reginald W. Jackson 2006-07 Hon. Wesley W. Steen (ret.) 2005-06 John D. Penn 2004-05 Michael P. Richman 2003-04 Bettina M. Whyte 2002-03 Andrew W. Caine 2001-02 Richardo I. Kilpatrick 2000-01 Keith J. Shapiro 1999-2000 Ford Elsaesser 1998-99 Deborah D. Williamson 1997-98 Robert M. Fishman 1996-97 Robert M. Zinman 1994-96 Robin E. Phelan 1991-94 Robert E. Feidler 1989-91 Hon. William L. Norton, Jr. (ret.) 1987-89 Richard A. Gitlin 1982-87 L.E. Creel III…