Corporate Restructuring & Bankruptcy
In this Special Report: "Navigating the Retail Apocalypse," "Bogart That Joint, But Don't Bankrupt It: Cannabis Businesses in Bankruptcy," "Faster, Shorter, Smarter, Better: Strategies for a New Era of Bankruptcy," "When the American Dream Ends in Bankruptcy, Immigrant Entrepreneurs Face Unique Challenges," "D&O Policy 'Bankruptcy Exclusion' Held To Be an Unenforceable 'Ipso Facto' Clause," "CDS 'Net Short' Holder Market Developments" and "Mitigating Lender Risk in Constructive Fraudulent Transfer Litigation."
September 23, 2019 at 04:11 PM
2 minute read
There may continue to be high numbers of retailers filing for bankruptcy protection in the short term, based on macroeconomic and industry-specific developments, but retailers that are proactive and comprehensive in their approach will be much more likely to avoid being a part of the "Retail Apocalypse."
Any cannabis-related business or any business in a relationship with one will likely find itself barred from the door of the federal bankruptcy courts.
Practitioners are increasingly using pre-packaged and pre-negotiated cases, drafting clearer and more concise pleadings, employing smarter deposit management practices, and harnessing improved technology—strategies for a new era of bankruptcy.
No matter what the size of the businesses, the United States provides a plethora of examples of success but also, unfortunately, failure.
This new decision is significant because lawsuits against former (and current) officers and directors of debtors commonly are brought by trustees, creditors' committees so-empowered by bankruptcy court orders, or, as here, by trusts established under plans of reorganization. Because insurance policies often are the only viable source of recovery for the claims asserted in such lawsuits, this decision potentially opens a pathway to creditor recovery in other similar matters.
The market response to the perceived issues created by net-short holders continues to evolve.
Lenders must carefully analyze the full ramifications of how best to approach the constructive fraudulent transfer issue when it emerges in their bankruptcy case.
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