04/07/2010 - Weathering the Storm: Does the Bankruptcy Code Restrict a Liquidation Trustee’s Power after Plan Confirmation?
Reversing the decision of the United States District Court for the Northern District of Illinois, the Seventh Circuit (the “Court”) held in Grede v. Bank of New York Mellon, et al., No. 09-3121 (7th Cir. Mar. 18, 2010) that neither the Bankruptcy Code (the “Code”) nor the Supreme Court’s decision in Caplin v. Marine Midland Grace Trust Co., 406 U.S. 416 (1972) apply to the activities of a post-confirmation liquidating trustee appointed in a liquidating trust created by a confirmed plan of reorganization.

03/25/2010 - Weathering the Storm: Third Circuit Ruling on Credit Bidding is Bad News for Lenders
On March 22, 2010, the Third Circuit released its long-awaited ruling in the Philadelphia Newspapers case regarding the applicability of credit bidding. In Philadelphia Newspapers, the proposed plan of reorganization provided for a sale of assets free of the liens of the secured creditors without allowing the secured creditors to credit bid on the assets.

03/11/2010 - Weathering the Storm: Single Asset Real Estate Cases
From 2010 until 2013, approximately $1.4 trillion of commercial real estate loans will mature. This alert discusses the rules governing Single Asset Real Estate (SARE) Chapter 11 cases.

02/23/2010 - Weathering the Storm: The FDIC’s Authority to Repudiate Contracts
The current economic climate has led to a dramatic increase in bank failures over the past few years. In 2009 alone, 140 banks failed, compared to 26 bank failures in 2008 and only 3 bank failures in 2007. The Federal Deposit Insurance Corporation (the “FDIC”) recently announced that it has 702 banks on its “Problem List” as of December 31, 2009, up 27 percent from 552 banks on September 30, 2009. This acute trend has heightened the awareness and interest in the role of the FDIC as receiver of a failed bank.

06/19/2009 - Weathering the Storm: Options to Remove Liabilities for High Retiree Medical Costs from a Company’s Balance Sheet: VEBAs
High legacy costs for retiree medical benefits, along with Financial Accounting Standards Board Standard No. 158, which requires balance sheet recognition of such liability, has forced many companies to face the true size of the retiree medical obligations and to consider ways to reduce or limit costs.

05/27/2009 - Weathering the Storm: Retiree Benefits and Section 1114
Retiree benefits are often a central issue in bankruptcy cases. For many employers the high cost of retiree medical benefits has been a significant contributing factor to the Chapter 11 filing and a matter of ongoing concern if the debtor is to be able to successfully reorganize. Understandably, employees, retirees and unions are equally concerned about the status of retiree benefits. This alert discusses Section 1114 of the Bankruptcy Code.

05/07/2009 - Weathering the Storm: Modifying Your Company’s Debt: Tax Trap or Treasure?
Debtors increasingly are requesting that their creditors modify the terms of their debts because of difficulty or inability to service their debts in accordance with the debts’ existing terms. Faced with the prospect of debtor defaults and having to foreclose on property securing their loans causing the accrual of financial losses, creditors, too, often have an incentive to restructure debt to maximize their returns.

04/23/2009 - Weathering the Storm: Recent Decision Affects Setoff Under Netting Agreements
Companies that engage in multiple transactions with different entities of related groups often enter into contractual netting agreements that allow the setoff of obligations between entities within the groups. The effectiveness of these agreements has been called into question by a recent decision of a bankruptcy court in Delaware, which refused to allow a party to a contractual netting agreement to offset its obligations to the debtors against obligations of the debtors under the netting agreement. Parties to such netting agreements may have to reconsider how to structure such agreements and how to defend their effectiveness in court.

03/23/2009 - Waiver, Forbearance Agreements After Default
If the current economic downturn continues, the number of borrowers that default under debt agreements will increase significantly. A previously prized borrower that once could dictate terms to its lender likely will find itself with fewer options when facing a default and will be forced to work with its existing lender to obtain either a waiver or a forbearance agreement. This article, featured in Texas Lawyer, outlines steps to be considered when advising a client facing a default. For the complete article click here.

02/05/2009 - Weathering the Storm: I Woke up this Morning and I’m in Default. What do I do now?
Many companies entered into their existing debt agreements before the current economic crisis. As a result, the financial covenants in their debt agreements were based upon financial projections and assumptions that are no longer appropriate or attainable. Therefore, more companies are waking up to face defaults under financial covenants that they never anticipated and are left wondering what do they do next.

01/18/2006 - Location for National Bank for Diversity Jurisdiction
On January 17, 2006, a unanimous United States Supreme Court held in Wachovia Bank, N.A. v. Schmidt that, for purposes of accessing federal courts under the current diversity jurisdiction statute, 28 U.S.C.§1348, a national bank is a citizen only of the state in which its main office, as set forth in its articles of association, is located.

12/01/2005 - 2005 Texas Usury Reform: Finance Code Amendments Relating to Commercial Loans
In Texas, a lender who contracts for, charges, or receives interest in excess of the amount allowed by law can be subject to harsh penalties.  In 1997 and 1999, the Texas Legislature passed several significant reforms that provided some relief to lenders under Texas’ usury statutes.