Joseph N. Argentina Jr.

April 03, 2015 | The Legal Intelligencer

A recurring theme in our columns is how directors' and officers' fiduciary duties are examined as the corporation approaches financial distress. In fact, we have been writing for The Legal long enough that today we report again on a U.S. Court of Appeals for the Third Circuit case styled Official Committee of Unsecured Creditors on Behalf of the Estate of Lemington Home for the Aged v. Baldwin, No. 13-2707 (3rd Cir. Jan. 26, 2015), that we wrote on more than three years ago. In 2011, the Third Circuit reversed a decision by the U.S. District Court for the Western District of Pennsylvania granting summary judgment in favor of the defendants and remanded the matter for trial, which we wrote on at that time. Later, when the district court scheduled the case for trial, the defendants took action on mandamus to the court requesting that the trial schedule be relaxed. Finally, in a decision dated Jan. 26, the court considered an appeal from jury verdicts of liability and compensatory and punitive damage awards against the officers and directors of a nursing home facility that closed after filing for Chapter 11 back in 2005.

By Andrew C. Kassner and Joseph N. Argentina Jr.

9 minute read

April 02, 2015 | The Legal Intelligencer

A recurring theme in our columns is how directors' and officers' fiduciary duties are examined as the corporation approaches financial distress. In fact, we have been writing for The Legal long enough that today we report again on a U.S. Court of Appeals for the Third Circuit case styled Official Committee of Unsecured Creditors on Behalf of the Estate of Lemington Home for the Aged v. Baldwin, No. 13-2707 (3rd Cir. Jan. 26, 2015), that we wrote on more than three years ago. In 2011, the Third Circuit reversed a decision by the U.S. District Court for the Western District of Pennsylvania granting summary judgment in favor of the defendants and remanded the matter for trial, which we wrote on at that time. Later, when the district court scheduled the case for trial, the defendants took action on mandamus to the court requesting that the trial schedule be relaxed. Finally, in a decision dated Jan. 26, the court considered an appeal from jury verdicts of liability and compensatory and punitive damage awards against the officers and directors of a nursing home facility that closed after filing for Chapter 11 back in 2005.

By Andrew C. Kassner and Joseph N. Argentina Jr.

9 minute read

February 20, 2015 | The Legal Intelligencer

Long after the bankruptcy is filed and the debtor's business is sold or reorganized, stakeholders investigate the causes of the failure and whether transactions that caused the bankruptcy or took place after the company was insolvent should be avoided for the benefit of the estate and creditors.

By Andrew C. Kassner and Joseph N. Argentina Jr.

7 minute read

February 19, 2015 | The Legal Intelligencer

Long after the bankruptcy is filed and the debtor's business is sold or reorganized, stakeholders investigate the causes of the failure and whether transactions that caused the bankruptcy or took place after the company was insolvent should be avoided for the benefit of the estate and creditors.

By Andrew C. Kassner and Joseph N. Argentina Jr.

7 minute read

November 24, 2014 | The Legal Intelligencer

As we have reported previously, the trading of debt of distressed companies, often with the objective of gaining control through loan-to-own strategies, is big business. The post-Lehman era has generated significant court decisions involving situations where a change of control occurs of insolvent companies outside of bankruptcy by distressed debt and equity players who then control the board. In many cases, the question is not if the company will be liquidated or sold, but when and how, and how it will be managed in the meantime.

By Andrew C. Kassner and Joseph N. Argentina Jr.

7 minute read

October 03, 2014 | The Legal Intelligencer

Like all legal matters, it appears that the speed of restructurings and bankruptcy administration is accelerating. The case is filed, the business and assets are promptly sold, and then lawsuits are brought by allegedly aggrieved parties against insiders, professionals and others asserting claims for damages resulting from the failure of the business and resulting bankruptcy.

By Andrew C. Kassner and Joseph N. Argentina Jr.

10 minute read

August 15, 2014 | The Legal Intelligencer

There are times when an unusual factual setting provides for a difficult legal analysis and even a surprising result. An example of such a case occurred recently in Bank of New York Mellon Trust. v. Miller (In re Franklin Bank), Case No. 13-1713-RGA, in which the U.S. District Court for the District of Delaware reversed the decision of the U.S. Bankruptcy Court for the District of Delaware and held that a creditor's failure to file a proof of claim for years following the bar date did not constitute a waiver of the creditor's contractual subordination rights or warrant equitable subordination of the creditor's claim.

By Andrew C. Kassner and Joseph N. Argentina Jr.

8 minute read

July 18, 2014 | The Legal Intelligencer

Given the improving economy, bankruptcy filings are at the lowest levels since before the Great Recession. Instead, many companies are implementing out of court by balance sheet debt restructurings or sales. Often the senior secured lenders pressure the company to commence a sale process and the company's board must grapple with the alternatives of pursuing an expedited sale process or pursuing alternative restructurings that could result in a better recovery for shareholders. The board engages a financial adviser as an expert to evaluate strategic alternatives, one of which is fashioning and implementing a sales process.

By Andrew C. Kassner and Joseph N. Argentina Jr.

9 minute read

February 07, 2014 | The Legal Intelligencer

As reported previously, the majority of Chapter 11 cases filed today do not result in a reorganization of the debtor but rather a sale of the business. For this reason, the rights of a secured creditor to "credit bid" at the sale up to the amount of the debt—which usually far exceeds the value of the assets—presents a critical gating issue.

By Andrew C. Kassner and Joseph N. Argentina Jr.

9 minute read

January 03, 2014 | The Legal Intelligencer

Governance structures utilized by private equity funds continue to be examined by the courts when the investment fails and the acquired company files for bankruptcy.

By Andrew C. Kassner and Joseph N. Argentina Jr.

9 minute read