On May 22, 2020, amidst the deepest possible gloom about COVID-19’s impact on travel, the car rental giant, Hertz Global, filed for Chapter 11. According to reporting by Barrons,[1] during the reorganization, Hertz drastically cut the size of its
Herrick Restructuring Review
The Herrick Restructuring Review, published by Herrick, Feinstein LLP, focuses on developments and analysis in bankruptcy and restructuring law. It covers topics such as Chapter 11 filings, asset sales under Section 363, creditor rights, litigation involving bankruptcy claims, and the treatment of financial instruments like make-whole payments in insolvency contexts. The blog also addresses mass tort bankruptcy cases, corporate restructuring strategies, and court decisions impacting restructuring practice. It provides updates on significant bankruptcy cases and procedural issues affecting debtors, creditors, and other stakeholders in financial distress situations.
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Lessons from US v. Holmes: Limits of the Attorney-Client Privilege in Communications with Corporate Clients and their Executives
On June 3, 2021, U.S. Magistrate Judge Nathanael M. Cousins ruled that ex-Theranos CEO Elizabeth Holmes could not assert attorney-client privilege to block disclosure of her communications with Theranos’s former counsel, Boies Schiller Flexner LLP, in connection with her upcoming…
Illinois Bankruptcy Court Weighs In on Chapter 7 Substantial Contribution Claims
In re Concepts America, Inc., 625 B.R. 881 (Bankr. N.D. Ill. 2021), weighs in on a murky question: Can a creditor make an administrative expense priority claim because it made a substantial contribution in a case under chapter 7? The…
Bad Faith or Business Judgment?
Brooks Brothers’ minority shareholders and unsecured creditors, TAL Apparel Ltd. (“TAL Apparel”) and its subsidiary Castle Apparel Ltd. (“Castle”), recently brought an action against the men’s retailer’s former owners, the Del Vecchio family. TAL Apparel and Castle allege bad faith…
Texas Bankruptcy Court Dismisses NRA Bankruptcy Cases, Finding They Were Not Filed in Good Faith
On May 11, 2021, Judge Harlin D. Hale dismissed the chapter 11 case filed by the National Rifle Association after finding that it was not filed in good faith. Judge Hale ruled that the case was “filed to gain an…
Voting Rights Provisions in Intercreditor Agreements May Not Be Enforceable As Expected
In an anomalous decision by the Bankruptcy Court in the District of Kansas, the court declined to enforce the voting provisions in subordination agreements that allowed the senior creditor to vote on behalf of a group of subordinated creditors. Reversing…
Bronx Miracle Gospel Tabernacle: Lender’s Nightmare Continues
In a recent appeal to the Second Circuit, Bronx Miracle Gospel Tabernacle Word of Faith (the “Church”), asks the Second Circuit for relief from the sale of its property by a bankruptcy trustee. The Church’s action seeks damages against the…
Smile, You’re on Camera! Considerations for Remote Depositions
If work-from-home dress codes are any indication, remote arrangements require us to walk the line between flexibility and abuse. Pajamas from the waist down? Why not! Joining a video conference in your robe? Only if you’re the judge.
Similar issues…
Car Club Seeks Chapter 11 Protection Despite Growing Membership in “Defensive Move”
Despite a relatively strong 2020, New York Classic Motors, LLC, a unit of Classic Car Club Manhattan, filed for chapter 11 protection on April 9, 2021. Classic Car Club Manhattan is a private club where members can drive an impressive…
Prospective Loss of Equity Is No Basis to Enjoin a UCC Foreclosure, Appellate Division Holds
A First Department decision from last month makes it harder for mezzanine borrowers to enjoin UCC foreclosure sales.
When there is a default under mezzanine loan documents, the lenders can retake their collateral by noticing and conducting foreclosure sales under…