The purchase and sale of assets by a debtor is governed by Section 363 of the Bankruptcy Code. So-called “363 sales” are typically attractive from a buyer’s perspective (and may be a primary reason for a bankruptcy filing). Perhaps the most important benefit afforded to buyers in 363 sales is the ability to acquire assets “free and clear” of claims and interests of third parties. Section 363(f)(5) of the Bankruptcy Code provides that a debtor can sell property free and clear of any interest in such property when a third party “could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of such interest.” But what constitutes an “interest” remains the subject of some debate, particularly as it relates to successor liability claims. One category of successor liability claims that may arise in traditionally unionized industries are the claims of pension funds that are triggered by a participant’s withdrawal. “Withdrawal liability” arises under the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”) and may, at times, be asserted against a purchaser of the participant’s assets, typically where it had notice of the claim at the time of the acquisition and where there exists a “substantial continuity” in the business operations following the purchase. Continue Reading Successor Liability and Section 363: A Broad Interpretation of an “Interest in Property”
Another Victim of the Crypto Winter
On September 22, 2022, Compute North Holdings, Inc. and certain affiliates filed bankruptcy in the Southern District of Texas in Houston. The company describes itself as “a leader in data centers, focused on delivering sustainable, cost-effective infrastructure for customers in the blockchain, cryptocurrency mining and distributed computing space.” See Declaration of Harold Coulby, Chief Financial
Your Counterparty Filed Chapter 11 – Make Sure to Check These 10 Boxes
On September 14, Crowell partners Rick Hyman and Gregory G. Plotko, together with Dawn Haghighi, General Counsel of PVC Murcor, published an article on the Association of Corporate Counsel’s ACC Docket, “Your Counterparty Filed Chapter 11 – Make Sure to Check These 10 Boxes.” The article provides valuable insight for in-house counsel who find themselves
Celsius Update
In the short time since we last provided an update regarding the bankruptcy cases of Celsius Networks LLC and its affiliates (here), there have been a number of material developments to report.
- As ordered by the court, the debtors filed copies of all versions of Celsius’ Terms of Use that have been in
Merchant Cash Advance Redux: Loan vs True Sale – New York Federal Courts Weigh In
In our February 14, 2022 post, we highlighted certain consequences regarding the treatment of a merchant cash advance (“MCA”) transaction as a “loan” rather than a “true sale” of receivables or future receivables and the implications of such treatment to an MCA provider. Among the takeaways was that a court’s characterization of an MCA transaction as a loan opens an MCA provider up to a host of potential claims by cash advance recipients (“customers”) and their successors (e.g., bankruptcy trustees) that are not otherwise available if the transaction is treated as a true sale.Continue Reading Merchant Cash Advance Redux: Loan vs True Sale – New York Federal Courts Weigh In
Voyager’s Bankruptcy Case is Picking Up Steam
There is much to report since our last update on Voyager Digital’s bankruptcy case discussed here.
- Importantly, the court set a “bar date” with respect to claims arising prior to the petition date. Proofs of claim, including those with respect to administrative claims arising under section 503(b)(9) of the Bankruptcy Code, must be actually
Celsius Networks’ Bankruptcy Case Update: It’s Still Early Days
Now that their bankruptcy filing is a few weeks behind us, we provide below an update on certain matters of interest in the case of Celsius Networks and its affiliates. Of course, it’s still very early in the bankruptcy case — and in cryptocurrency cases in general — but we have already heard from many distressed
Voyager Digital’s Bankruptcy Case: The First 3 Weeks
There is heightened public interest in what may be an increasing trend of digital asset bankruptcy filings and in the resulting legal and business issues which are both novel and complex. It’s in that vein, we provide this update on Voyager Digital (as we originally discussed here ).
Voyager Digital Holdings, Inc. and two affiliates
SDNY Bankruptcy Court Prohibits a Court Appointed Claims Agent from Selling Direct Access to Creditor Claims Register Data to XClaim
In a matter of first impression relating to an important bankruptcy claims administration issue, Judge Sean H. Lane of the United States Bankruptcy Court for the Southern District of New York, recently denied the ability of a court appointed claims agent to sell and profit from providing direct access to publicly available claims register information.
Cryptocurrency Hedge Fund Three Arrows Capital and Platform Voyager Digital Resort to Bankruptcy for Relief
The first week of July has brought with it a flurry of activity in the digital asset markets – but not the type of activity that investors in the space likely hoped for.
On June 27th, Three Arrows Capital, Ltd. (“3AC”) commenced a liquidation proceeding in the British Virgin Islands, followed on July