Tabla de contenidos para August 2023 en ABI Journal

Coordinating Editor Aaron M. Kaufman Gray Reed & McGraw LLP; Dallas Coordinating Editor Bradley D. Pack Engelman Berger, PC Phoenix Coordinating Editor Christina Sanfelippo Cozen O’Connor Chicago Aaron Kaufman is a partner with Gray Reed & McGraw LLP 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. Bankruptcy Court Limits Bartenwerfer to Partnership or Agency Debts, Finding It Inapplicable to Fraudulent-Transferee Liability Can the recipient of a fraudulent transfer discharge the claim in light of Bartenwerfer? In In re Vulaj,1 Hon. Margaret M. Mann of the U.S. Bankruptcy Court for the Southern District of California was called on to reconcile a potential conflict between Bartenwerfer and Husky —…

Seth H. Lieberman Pryor Cashman LLP New York Sameer M. Alifarag Pryor Cashman LLP New York Seth Lieberman is chair of Pryor Cashman LLP’s Bankruptcy, Reorganization and Creditors’ Rights Group and co-chair of the firm’s Corporate Trust Practice in New York. Sameer Alifarag is an associate in the same office. In chapter 11 cases, the Office of the U.S. Trustee (UST) is required to appoint an official committee of unsecured creditors (UCC) to consult with the debtor; investigate the acts, conduct and financial condition of the debtor; and participate in the formulation of a reorganization plan.1 In fact, § 1102 of the Bankruptcy Code mandates that, absent certain circumstances, the UST undertake this appointment. Conventional wisdom suggests that the decision to form a UCC and/or determine its composition rests within…

Ken Mann SC&H Capital Ellicott City, Md. Franklind Lea The Brattle Group Washington, D.C. Julia Zhu The Brattle Group New York Ken Mann is managing director of SC&H Capital’s Special Situations Practice in Ellicott City, Md. Franklind Lea, CIRA is a principal with The Brattle Group’s Bankruptcy and Restructuring Practice in Washington, D.C. Julia Zhu, CFA, CFE is a senior associate with The Brattle Group’s Bankruptcy and Restructuring Practice in New York. In a chapter 11 case, a debtor is typically focused on its own survival, which likely closely identifies with Billie Eilish’s song “No Time to Die.” In contrast, a lender’s motivations for providing a debtor with debtor-in-possession (DIP) financing vary widely. Sometimes, the motivation is purely to earn interest and fees on the DIP loan itself, reminiscent of Pink…

Hon. Cynthia A. Norton U.S. Bankruptcy Court (W.D. Mo.); Kansas City Prof. Nancy B. Rapoport UNLV William S. Boyd School of Law Las Vegas Hon. Cynthia Norton is a judge for the U.S. Bankruptcy Court for the Western District of Missouri in Kansas City. Nancy Rapoport is the Garman Turner Gordon Professor of Law at the William S. Boyd School of Law and an affiliate professor of Business Law and Ethics in the Lee Business School at the University of Nevada Las Vegas. For those familiar with the New York Times’s The Conversation column,1 we’re about to do the same with a discussion about what went wrong in Mata v. Avianca Inc.2 The short version is that the plaintiff’s lawyer used ChatGPT to create a brief, but that brief contained cases…

Daniel Kokini FTI Consulting, Inc. New York Daniel Kokini is a managing director with FTI Consulting, Inc. in New York. With the current tight credit market conditions and high borrowing rates, distressed M&A markets are not nearly as accommodating or robust as they have been in recent years. Consequently, lenders of all types (e.g., banks, collateralized loan obligations, private-credit funds and hedge funds) to a distressed business should be prepared to be equitized in a reorganization scenario, and to own and operate the business upon emergence. In these situations, new shareholders will need to constitute a new board of directors. There are some unique considerations to keep in mind when forming a board for a company that has just emerged from bankruptcy compared to other companies of the same relative…

Katherine Nixon U.S. Bankruptcy Court (D. Minn.); St. Paul Emily Doyle U.S. Bankruptcy Court (D. Minn.); Minneapolis Katherine Nixon is the term clerk to Hon. William J. Fisher of the U.S. Bankruptcy Court for the District of Minnesota in St. Paul. Emily Doyle is the term clerk to Hon. Katherine A. Constantine of the U.S. Bankruptcy Court for the District of Minnesota in Minneapolis. Warning: This article is “rulesy” at times. If you take nothing else away from it, go read Rule 9036 of the Federal Rules of Bankruptcy Procedure (FRBP), specifically subsection (e). Yes, Rule2 9036‌(e) exists, and it should be read. Now, read on for some insight into electronic service,3 after which you might find yourself reserving a pending motion. This article offers some practical tips to help ensure…

Two attorneys with Snell & Wilmer, LLP have been promoted to partner. Joshua R. Duffy has been an ABI member since 2021 and is based in Costa Mesa, Calif. Bret R. Evans has been an ABI member since 2016 and is based in Salt Lake City. Stephen J. (Joe) Brown has joined Plunkett Cooney’s Commercial Litigation and Banking, Bankruptcy and Creditors’ Rights Practice Groups in Bloomfield Hills, Mich. He has been an ABI member since 2013. David M. Schilli of Robinson, Bradshaw & Hinson, PA (Charlotte, N.C.) has been named as a 2022 “Legal Elite” by Business North Carolina. He has been an ABI member since 1999. Nathan Cook has joined Teneo as a senior managing director in the company’s Financial Advisory Business. He has been an ABI member since…

Joy Kleisinger Frost Brown Todd LLP Cincinnati Hayley Mullen University of Dayton School of Law Dayton, Ohio Joy Kleisinger is a restructuring associate with Frost Brown Todd LLP in Cincinnati and is co-Newsletter Editor of ABI’s Young & New Members Committee. Hayley Mullen is a secondyear student at the University of Dayton School of Law in Dayton, Ohio, and is a summer associate with Frost Brown Todd LLP in Cincinnati. The COVID-era pause on student loan payments and interest will finally come to an end after eight extensions on Sept. 1, 2023.1 The current collective amount of student debt in the U.S. sits at around a staggering $1.6 trillion, with the average borrower owing approximately $37,172.2 As the deadline looms nearer, borrowers are reevaluating their financial situations, and only a few…

Richard R. Thames Thames | Markey Jacksonville, Fla. Richard Thames is the managing partner of Thames | Markey in Jacksonville, Fla., and is board certified in business bankruptcy law by the American Board of Certification. Editor’s Note: ABI’s Subchapter V Task Force, launched in April, will study practitioners’ experiences with the three-year-old law, culmulnating in a final report to be released in 2024. Learn more at subvtaskforce.abi.org. The Small Business Reorganization Act of 2019 (SBRA), codified at 11 U.S.C. § 1181-1195, created a new subchapter of reorganizations known as subchapter V “to streamline the bankruptcy process by which small business debtors reorganize and rehabilitate their financial affairs.”1 Among the many advantages of subchapter V is the ability to confirm a reorganization plan without an accepting class or application of the absolutepriority…

Coordinating Editor Leslie A. Berkoff Moritt Hock & Hamroff LLP; New York Candice L. Kline Saul Ewing LLP Chicago Leslie Berkoff is a partner with Moritt Hock & Hamroff LLP in New York and chairs the firm’s Dispute Resolution Practice Group. Candice Kline is a partner with Saul Ewing LLP in Chicago, and Turner Falk is an associate in the firm’s Philadelphia office. Bankruptcy is a world of balance, compromise and economics, and is often a perfect venue to foster and encourage the use of mediation in various stages of the reorganization process. Good bankruptcy lawyers are likewise skilled dealmakers who bring together diverse factions, achieve consensus, secure votes or buy-in, and emerge with a consensual plan or approach to a process. Mediation is highly prevalent in chapter 11 practice.…

Eve H. Karasik Levene, Neale, Bender, Yoo & Golubchik, LLP Los Angeles Eve Karasik is a senior partner with Levene, Neale, Bender, Yoo & Golubchik, LLP in Los Angeles. She is ABI’s Vice President-Diversity & Inclusion and a Fellow in the American College of Bankruptcy. In its second year and the brainchild of Hon. Frank J. Santoro of the U.S. Bankruptcy Court for the Eastern District of Virginia (Norfolk) and Aja Carr Favors (a chapter 7 panel trustee and attorney practicing in Chicago),1 the Bankruptcy Inclusion, Diversity, Equity and Accessibility Consortium (the “Bankruptcy IDEA Consortium”) is a network of insolvency-related organizations. Over the past few years, almost every insolvencyrelated organization has created its own diversity, equity and inclusion (DEI) group to address issues of bias and foster inclusion and acceptance…

Stephen W. Sather Barron & Newburger, PC Austin, Texas Stephen Sather is head of Barron & Newburger, PC’s Bankruptcy Section in Austin, Texas, and is board certified in business bankruptcy law by the American Board of Certification and the Texas Board of Legal Specialization. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) added new responsibilities for consumer debtors. These include pre-petition credit counseling,1 satisfying a means test for above-median debtors2 and post-petition financial education.3 BAPCPA also added new requirements for consumer bankruptcy lawyers, including that they provide required notifications,4 as well as a written agreement.5 These new requirements increased the cost for consumer debtors. According to ABI’s Consumer Bankruptcy Fee Study, the average cost of filing a chapter 7 case increased by 30 percent while the cost…

ABI President Soneet R. Kapila KapilaMukamal, LLP Fort Lauderdale, Fla. Soneet Kapila is a founding partner of KapilaMukamal, LLP in Fort Lauderdale, Fla. He previously served as ABI’s Treasurer. Having served as ABI President for just over three months, while it is good to remain focused on advancing the organization, I want to take some time to reflect on life and family. Life takes unexpected turns. The recent passing of Bill Brandt of Development Specialists, Inc. leaves a vacuum in the insolvency landscape. His contributions to our industry will leave an everlasting impression. Consistent with my theme that every ABI leader and President attempts to advance this organization a step further, Bill certainly did his part. We at ABI pay homage to Bill, and we invite you to read the tribute to…

Consumer Practice Extravaganza Returns This Fall Make plans now for this fall’s Consumer Practice Extravaganza (CPEX23), a virtual conference happening Oct. 30-Nov. 10. This is the third iteration of this popular event, and this year it promises to be bigger than ever, including presentations from judges from every U.S. bankruptcy court. You can also expect in-depth presentations on the following topics: • Student loan discharge, which will include perspectives from the Department of Justice on their new guidelines; • Chapter 13: the means test, real property issues, saving the family home (with a focus on Rule 3002.1), § 109 and more; • Subchapter V for consumer attorneys, including advice on when to use it vs. filing under chapter 13; • Artificial Intelligence: what to pay attention to and how it…

Biden Administration Announces $39 Billion in Student Debt Relief Following Administrative Fixes Despite the U.S. Supreme Court on June 30 striking down the Biden administration’s loan-forgiveness program, which aimed to provide millions of borrowers up to $20,000 in one-time federal student debt relief, the Department of Education on July 14 announced1 that it will begin notifying more than 804,000 borrowers that they have a total of $39 billion in Federal student loans that will be automatically discharged in the coming weeks. The forthcoming discharges are a result of fixes implemented by the Biden-Harris Administration to ensure that all borrowers have an accurate count of the number of monthly payments that qualify toward forgiveness under income-driven repayment (IDR) plans. “These fixes are part of the Department’s commitment to address historical failures…

Dr. Michael D. Sousa University of Denver Sturm College of Law Denver Michael Sousa, J.D., LL.M., M.A., Ph.D. is an associate professor of law and a sociologist at the University of Denver Sturm College of Law. Editor’s Note: This is an opinion piece and only reflects the viewpoints of the author. In Capital Volume I, German philosopher and economist Karl Marx unpacked the dynamics of capitalism by demonstrating the exploitative economic relationship between the owners of capital and the working class.1 During the late 20th century, neoliberal capitalism moved away from industrial manufacturing toward an economy organized around finance where the exploitative relationship has morphed into one between creditors and debtors.2 In the current credit-based economy, corporate and financial profits are primarily generated through extracting monthly payment streams from household income (with…

Mark Indelicato Thompson Coburn LLP New York Janine Figueiredo Thompson Coburn LLP New York Mark Indelicato is managing partner of Thompson Coburn LLP’s New York office. Janine Figueiredo is a partner, and Jacob Schwartz and Danielle Ullo are associates, in the same office. In the first half of 2023, corporate bankruptcy filings more than doubled compared to the same period last year, and are now at their highest rate in 12 years.1 Declines in the banking and mortgage industries have been particularly acute, stoking fear of another “Great Recession.” Although those fears appear reasonable at first glance, a deeper analysis of the causes underlying the current financial climate and that of 2008 indicates that the fears may be unfounded. While certain similarities exist, the underlying landscapes of the two economic…

Leslie R. Hendrix U.S. Bankruptcy Court (D. Ariz.); Phoenix Leslie Hendrix is a law clerk for Hon. Paul Sala in the U.S. Bankruptcy Court for the District of Arizona in Phoenix. In Transwest, the U.S. Court of Appeals for the Ninth Circuit ruled that the acceptance by a single class of creditors of a joint debtor reorganization plan met the requirements of § 1129‌(a)‌(10).1 Since that 2018 decision, no other circuit-level court has addressed whether § 1129‌(a)‌(10) requires the affirmative vote of a single class (per plan) or a single class by debtor (per debtor). Despite the dearth of recent circuit decisions, lower-level courts continue to wrestle with the issue. Transwest : “Per Plan” Within the Ninth Circuit In Transwest, five related debtors filed chapter 11 petitions.2 The debtors consisted…

Prof. Alexandra Sickler University of North Dakota School of Law Grand Forks, N.D. Alexandra Sickler is a professor with the University of North Dakota School of Law in Grand Forks, N.D., and the academic reporter for ABI’s Subchapter V Task Force. Congress enacted the Small Business Reorganization Act of 2019 (SBRA) to facilitate the reorganization of small and medium-sized business debtors in the U.S.1 Codified as subchapter V of chapter 11 of the Bankruptcy Code, the SBRA became effective on Feb. 19, 2020. Subchapter V aims to provide small and medium-sized businesses with a quicker, lowercost and more feasible path to reorganization than a traditional chapter 11 case. To date, more than 5,000 debtors have elected to file under subchapter V.2 Simultaneously, bankruptcy courts have generated more than three years of…

March (partial list) Kristin T. Mihelic U.S. Department of Justice San Diego Walker Mondt Heyl Royster Breese, Ill. Christopher Moss SCJ Commercial Financial Services Harrington, Del. Stephen Mott U.S. Bankruptcy Court (C.D. Cal.) Los Angeles Leigh Nazzario Rutgers Law School Downingtown, Pa. Devin Norris Ritchie Bros. Pleasanton, Calif. Andrea O’Connor Fitzgerald Law, PC East Longmeadow, Mass. Lindsay Thomas Olson In Lux Research and Analytics Coppell, Texas Alyssa Paddock Sheppard Mullin Richter & Hampton Brooklyn, N.Y. Kimberly Pageau Goodwin Procter LLP Brooklyn, N.Y. Jenny Park Pension Benefit Guaranty Corp. Washington, D.C. Jacob Pastor The Brattle Group Chicago Samit G. Patel Cullen and Dykman LLP New York Thomas Pearson Continental Partners Lawrence, Kan. Scott K. Phillips Healthcare Management Partners, LLC Washington, D.C. Charles Phiri CP Advisers Pty. Ltd. Johannesburg, South Africa Curtis…