Senate Considers Bankruptcy Code Changes to Tackle Student Debt Crisis – and to Make Some Colleges Pay for It
Bryan Cave | Bankruptcy & Restructuring Blog
by Olivia Scott
2y ago
  “Dealing with student debt is a pretty simple problem to solve.” As of May 2021, approximately 45 million Americans owe more than $1.7 trillion in student loan debt.[1]  For the arithmetically challenged, that means the average borrower has $38,000 in student loan debt.  Further using the power of averages, that means for each borrower with $10,000 in student loan debt (still a lot!), there is someone with $66,000 in student loan debt (ug).  And what we have read, and know from friends, colleagues, and family, show us that student loan debt exceeding $100,000, or double ..read more
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Now That We Found Assets, What Are We Going To Do With Them?
Bryan Cave | Bankruptcy & Restructuring Blog
by Brian Walsh
2y ago
“You can make me walk the plank – but please, don’t let the law render a claim for wartime losses as property of my bankruptcy estate!” My most recent post surveyed situations in which a debtor might lose assets, or see their value drop to zero, during a bankruptcy case.  This article addresses the opposite circumstance: how might a debtor’s estate gain new assets after a bankruptcy filing? First, the basics.  In general, the bankruptcy estate consists of “all legal or equitable interests of the debtor in property as of the commencement of the case.”  11 U.S.C. § 541(a)(1 ..read more
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Whoomp! (Where’d It Go?): Disappearing Assets in Bankruptcy
Bryan Cave | Bankruptcy & Restructuring Blog
by Brian Walsh
2y ago
In a recent post, I discussed three situations in which a debtor in bankruptcy might find itself dispossessed of assets that appeared to be property of the bankruptcy estate.  This article expands on that general idea and presents a compendium of situations in which creditors or circumstances may deprive a debtor of assets or their value. Editor’s Note:  this is likely not an asset upon which you should base your reorganization – see below. Adverse possession. Adverse possession is technically an application of the statute of limitations, discussed more generally below. In re Cola ..read more
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Other People’s Property in Bankruptcy
Bryan Cave | Bankruptcy & Restructuring Blog
by Brian Walsh
2y ago
Nearly sixty years ago, Justice Hugo Black wrote that the Bankruptcy Act of 1898 “simply does not authorize a trustee to distribute other people’s property among a bankrupt’s creditors.”  Pearlman v. Reliance Ins. Co., 371 U.S. 132, 135-36 (1962).  Though the bankruptcy statutes have been modernized and amended on a number of occasions since, Justice Black’s observation remains true today.[1] This article summarizes the courts’ approaches to three situations in which a debtor in bankruptcy may be in possession of property that legally or equitably belongs to someone else.  What ..read more
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A Case for Fewer First Day Motions
Bryan Cave | Bankruptcy & Restructuring Blog
by Timothy Bow
3y ago
Chapter 11 petitions usually are accompanied by a panoply of first day motions.  A newly-minted chapter 11 debtor needs to be able to—among other things—pay its employees and continue employee benefits in the ordinary course of business, pay certain prepetition claims, satisfy its obligations to taxing authorities, and maintain its insurance and surety bond programs.  Chapter 11 cases often are also accompanied by motions seeking various forms of procedural relief, including joint administration of multi-debtor cases, relief related to consolidation of the debtors’ creditor matrix an ..read more
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Maximizing the Value of Mediation During the COVID-19 Pandemic and Beyond
Bryan Cave | Bankruptcy & Restructuring Blog
by Chelsey Rosenbloom
3y ago
Perhaps the most obvious shift in day-to-day legal practice in the midst of the COVID-19 pandemic is the “new normal” of virtual meetings and court proceedings.  While these can present some degree of challenge, video conferencing mediation instead of face-to-face mediation is perhaps one of the most challenging This post sets forth fundamental tips to navigate a virtual mediation – and importantly – provides a reminder that many of the aspects of a successful mediation remain constant even during a time when so much of daily life feels variable. Preparation:  Several elements should ..read more
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Part III: Supplier considerations: Assessing and leveraging your leverage
Bryan Cave | Bankruptcy & Restructuring Blog
by Andrew Schoulder
4y ago
As most global markets attempt a return to normal (or a new form of normal) business, it is hard to imagine a sector or an industry that isn’t already reeling from the effects of the past three months. Getting back on your feet is hard enough in the current environment, without having to worry about further setbacks impacting your business. But how would you react if your key supplier called tomorrow to let you know that they were insolvent and unable to provide you with goods or services? Worse, what if you had already placed (and paid for) a large order with them that was critical to your ab ..read more
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Managing Counter-Party Risk in the Pandemic
Bryan Cave | Bankruptcy & Restructuring Blog
by Andrew Schoulder
4y ago
Part II: Customer Considerations: Risk Mitigation = Smarter Sales In the coming months, very few companies, whether public or private, will be able to avoid including statements in their quarterly reports or financials that attribute single or double digit percentage declines in revenue to doubtful accounts and insolvencies of major customers caused by the pandemic. For many, if not most, that disclosure will continue beyond Q4 of 2020 and through 2021. In prior periods, lenders and other key stakeholders may have been tolerant to these one-off, non-systematic declines due to unanticipate ..read more
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Managing Counter-Party Risk in the Pandemic
Bryan Cave | Bankruptcy & Restructuring Blog
by Andrew Schoulder
4y ago
Part I: Getting on the Same Page Globally, boards and management teams are taking stock of current operations and finances to identity vulnerabilities to the unprecedented distress that markets are anticipating from the pandemic for the next 12-18 months.  As part of those discussions, many retail businesses (and those with operations related to retail, like landlords, logistic companies, shipping interests, etc.) are focusing on receivables and risk weighting as to the collectability and the follow-on impact of doubtful accounts. These conversations will inevitably lead to the age-old co ..read more
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Redefining Extraordinary Circumstances in the Wake of COVID-19: Finding Consistency in Difficult Times
Bryan Cave | Bankruptcy & Restructuring Blog
by Andrew Schoulder
4y ago
Editor’s Note:  This was originally published in CFO.com on April 21, 2020. Humanity has largely embraced the “we are in this together” mentality from a health crisis perspective. Yet, even as world leaders scramble to contain the COVID-19 pandemic, we have yet to fully grasp the follow-on impact from the pandemic and particularly, how it will affect world economies. For this “second phase” of the world’s response to the pandemic, the ultimate question is whether business and financial counter-parties will equally share the risk of loss. Bankruptcy judges have jurisdiction to fashion reme ..read more
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