The current process for administering chapter 7 cases was established at a time when paper documents had to be hand-delivered to the courts for processing. It was an era of “runners.”
Committees
In June 2015, Bankruptcy Judge John T. Gregg ruled in In re Family Christian[1] that all administrative priority claims, including those arising under § 503(b)(9), must be paid as part of the price of a § 363 sale of the debtor’s assets.
Factual Background
One of the most significant benefits of acquiring assets out of a bankruptcy estate is the ability to obtain those assets free and clear of liens, claims, interests and encumbrances, pursuant to § 363 of the Bankruptcy Code and the terms of a bankruptcy court sale order.
We know 2015 was a bleak year for coal, oil and natural gas producers, with at least 67 bankruptcy filings. 2016 is not looking much better. Surpluses of coal, oil and natural gas continue to weigh down prices and threaten companies’ balance sheets.
Your client or borrower is a troubled business that desperately needs to find a buyer or new money, and fast. Somebody suggests that your client/borrower hire an intermediary, but the company already has one “offer” (for purchase, refinance, investment), so is reluctant to hire an investment banker to run a thorough process to find other possible solutions.
In September 2015, the U.S. Court of Appeals for the Third Circuit issued an opinion in In re ICL Holding Co. Inc. that further reinforces the ability to use § 363 sales and settlements to resolve chapter 11 cases.
Section 363 sales are a common vehicle for a debtor and its creditors to receive fair value for the debtor’s assets through an open auction process supervised by the bankruptcy court. An open auction process is designed to generate a number of competitive offers for the debtor’s assets.
On June 16, 2015, the Asset Sales Committee sponsored a webinar titled Buying and Selling Oil & Gas Assets in Bankruptcy Cases. The presentation, by Thompson & Knight Partner Ira L. Herman, Greenberg Traurig Shareholder Shari Heyen and Conway MacKenzie Managing Director Bryan M. Gaston, is available in ABI’s CLE Center.
Over the past two decades, chapter 11 has become the favored forum for the sale of distressed companies in the U.S. Section 363 of the U.S. Bankruptcy Code is a strong tool for maximizing the value of struggling companies and providing predictability in distress sales.
Post-Annual Spring Meeting is a time of change for ABI, including our committee's leadership! The term of John Hutton, our co-chair for the past several years, has ended, and Brad Sharp has been named as a new co-chair. Shaunna Jones has become our Newsletter Editor. To date, the Listserve Facilitator position remains open. If you are interested in joining the leadership team by filling this role, please email us. We thank those departing leaders who have served us well, and welcome aboard our new committee leaders.
Mr. Matthew J. LoCascio
Co-Chair
SC&H Capital
Ellicott City, MD
(443) 951-4846
Co-Chair
SC&H Capital
Ellicott City, MD
(443) 951-4846
Ms. Randye B. Soref
Co-Chair
Polsinelli
Los Angeles, CA
(310) 556-1801
Co-Chair
Polsinelli
Los Angeles, CA
(310) 556-1801
Mrs. Hayley G. Harrison
Communications Manager
Wernick Law PLLC
Miami, FL
(561) 961-0922
Communications Manager
Wernick Law PLLC
Miami, FL
(561) 961-0922
Ms. Jane Kim
Education Director
Keller Benvenutti Kim LLP
San Francisco, CA
(415) 364-6793
Education Director
Keller Benvenutti Kim LLP
San Francisco, CA
(415) 364-6793
Mr. William Hao
Membership Relations Director
Alston & Bird LLP
New York, NY
(212) 210-9417
Membership Relations Director
Alston & Bird LLP
New York, NY
(212) 210-9417
Mr. Christopher M. Candon
Newsletter Editor
Sheehan Phinney
Manchester, NH
(603) 627-8168
Newsletter Editor
Sheehan Phinney
Manchester, NH
(603) 627-8168
Mr. Steven L. Victor
Special Projects Leader
Development Specialists, Inc.
Chicago, IL
(312) 263-4141
Special Projects Leader
Development Specialists, Inc.
Chicago, IL
(312) 263-4141