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Has the Municipal Bankruptcy Tide Shifted?
George B. South III and Daniel G. Egan of DLA Piper write: Municipalities facing reductions in tax revenues, lower real estate values, underfunded pension plans, increased operating costs and fraud routinely search for ways to restore financial stability, and Chapter 9 is increasingly being considered as a viable option. Whether it is the best option remains, in many cases, to be seen.
'Circus & Eldorado' Court Rules on 'Bad Faith' for Vote Designation
Stroock & Stroock & Lavan's Jayme T. Goldstein, Kenneth Pasquale and Jonathan Canfield write: Given the severe implications of such extraordinary relief, courts have almost universally recognized that depriving creditors of the right to vote on a plan of reorganization is a drastic remedy. A recent ruling by the U.S. Bankruptcy Court for the District of Nevada is just the latest in a series of decisions in which a court found that, given the facts and circumstances it was confronted with, designation was nevertheless warranted.
Account for Lien Priority and Avoidance Considerations in Bankruptcy
Kristen V. Campana, a partner at Bracewell & Giuliani, and Shujun Tian, an associate with the firm, write that while the analysis of lien priority is always document- and party-specific, there are some basic parameters in which attorneys can educate clients so they are aware of the outcome permutations.
Valuing Forbearance in Fraudulent Transfer Actions
James H. Millar, a partner at Wilmer Cutler Pickering Hale and Dorr and Neil Steinkamp, a director at Stout Risius Ross, write that courts have routinely recognized that forbearance can comprise a component of reasonably equivalent value with respect to a fraudulent transfer analysis. However, courts at times reach a summary conclusion with respect to valuing forbearance without readily providing significant detail around the attendant calculations.
