Chapter 11

Too Close for Comfort? LATAM Judge Upholds $1.3 Billion in Intercompany Loans


A decision earlier this year in the LATAM Airlines Group bankruptcy addressed the validity of claims arising from intercompany loans between a corporate debtor’s affiliates.  Judge James L. Garrity’s opinion overruling objections to the claims provides helpful guidance on an issue that often gives rise to disputes in chapter 11 cases.


The Trap of Merchant Cash Advances and Financing


If you have a business, you have no doubt received advertisements for “merchant cash advances,” “merchant loans” or “merchant financing,” whether or not those specific terms are used.  If in doubt, just do a search for those terms and you will get a couple pages of sponsored ads (but be warned the big brother of the internet will flood you with ads after that).  Based on cases I have now, and calls I have received, business has picked up considerably for those


New Chapter 11 Filing Alert – Governors Gun Club Kennesaw, LLC


The Governors Gun Club of Kennesaw  filed a Chapter 11 case in the Northern District of Georgia on August 17, 2022. Case No. 22-20787-jrs. The reason for the filing, as stated in pleadings filed with the Court –


In a Case of First Impression, 11th Circuit Rules “New Value” Can Be Both Preference Defense and Administrative Claim


In Auriga Polymers, Inc. v. PMCM2, LLC, as Liquidating Trustee, No. 20-14647, 2022 WL 2800195 (11th Cir.


No Honor Among Creditors: Delaware Judge Issues Important Ruling On “Uptier” Transaction


Intercreditor disputes in bankruptcy are common.  Typically, however, they center around predictable disagreements between senior or junior classes of creditors such as valuation battles or lien perfection challenges.  A recent decision in the Delaware chapter 11 case of TPC Group has highlighted a new trend of “intra-creditor class warfare,” involving, in the understated words of


Second Circuit Split Resolved: No PPP Loans for Debtors in Bankruptcy


In March, the U.S. Court of Appeals for the Second Circuit joined a growing majority of courts with Springfield Hospital, Inc. v. Administrator for the U.S.


Preoccupied Congress Fails to Act, Sending Debt Limit Back Down to $2.7 Million and Reducing Availability of Subchapter V Protection for Small Businesses


For now, the Subchapter V debt limit is back down to $2.7 million.  Overshadowed by the contentious confirmation hearings for historic Supreme Court nominee Ketanji Brown Jackson, the Senate Judiciary Committee failed to act on proposed legislation that would have made permanent the increased $7.5 million debt limit and allowed more small businesses to file for bankruptcy protection under Subchapter V of Chapter 11.  Because of this congressional inaction, the legislation that temporarily increased the debt limit to $7.5 million expired on March 27, 2022.


Does a Declaration of Independence Suffice? A New Study Raises Significant Questions About “Independent Directors” of Large Distressed Companies


A paper to be published soon in the University of Southern California Law Review, “The Rise of Bankruptcy Directors,” is sharply critical of the increased use of supposedly “independent directors” by distressed companies, often in anticipation of filing for bankruptcy, and the related adverse impact on creditor recoveries.  Although the appointment of what the authors, Jared A.