Federal Courts Broadly Construe Subchapter V Eligibility
In 2019, Congress passed the Small Business Reorganization Act. A major facet of the Act was the creation of Subchapter V, which provides a more streamlined and efficient reorganization process for small businesses.
A requirement of Subchapter V...
Sixth Circuit Holds Arbitrability Must Be Decided By Arbitrator, Not AAA Administrator
In the United States, early agreements to arbitrate were met with judicial hostility by courts who felt their authority was usurped by private adjudicators, or who felt that individual consumers’ rights stood to be trampled by privatizing the...
Court Rebuffs NRA’s Bankruptcy Petition As Filed in Bad Faith
A federal bankruptcy judge recently ruled that the NRA cannot proceed with its bankruptcy because it filed its petition in bad faith. The story starts in New York, where the NRA is incorporated.
Last year, New York’s Attorney General...
Bankruptcy Courts Use Force Majeure Clauses in Commercial Leases to Provide Relief during the Pandemic
In cases as recent as January 27, 2021, bankruptcy courts have held that a force majeure clause in a lease agreement allowed for full or partial rent abatement despite the requirement by Section 365 of the U.S. Bankruptcy Code of debtors...
Importers May Still Be Able to File Claims for Refunds of Section 301 China Tariffs
U.S. companies that have imported goods manufactured in China and subject to List 3 or List 4a Section 301 tariffs may still be able to preserve their rights to seek refunds of those tariffs by joining litigation currently pending in the Court of...
Eleventh Circuit Upholds Discharge Injunction to Prohibit Post-Discharge Suit for Collection of a Nondischargeable Debt
On March 25, 2021, the Eleventh Circuit Court of Appeals ruled that a chapter 7 discharge prohibits the holders of a nondischargeable debt from suing the debtor post-discharge to collect a judgment. The Court in Suvicmon Dev., Inc. v. Morrison, 2021...
Third Circuit Confirms Triangular Setoffs Do Not Meet Mutuality Requirement of Section 553
In a precedential opinion on March 19, 2021 the Third Circuit Court of Appeals held that the use of a distribution agreement did not create an exception to the mutuality required by Section 553 of the U.S. Bankruptcy Code. The Third Circuit, in...
SBA Issues Guidance on PPP Loans and Change of Ownership Transactions
On October 2, 2020, the U.S. Small Business Association issued a Procedural Notice providing “information concerning the required procedures for changes of ownership of an entity that has received Paycheck Protection Program (PPP)...
Management Cannot Preclude Directors’ Access to Privileged Communications
A Delaware court recently held that a corporation’s management could not preclude the corporation’s directors from accessing privileged communications between management and company counsel. In In re WeWork Litigation, 2020 Del....
