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Maximizing the Value of Mediation During the COVID-19 Pandemic and Beyond

Perhaps the most obvious shift in day-to-day legal practice in the midst of the COVID-19 pandemic is the “new normal” of virtual meetings and court proceedings.  While these can present some degree of challenge, video conferencing mediation instead of face-to-face mediation is perhaps one of the most challenging

This post sets forth fundamental tips to navigate a virtual mediation – and importantly – provides a reminder that many of the aspects of a successful mediation remain constant even during a time when so much of daily life feels variable.

Preparation:  Several elements should be considered and discussed when preparing for a mediation session in order to achieve the most successful result.

  • Goals: Consider and understand your goals.  Clients and their counsel often discuss economic goals and alternatives, but should also identify non-economic sources of value.   Sources of non-economic value may open up ways of satisfying opposing parties’ goals.  For

Just File Your Notice of Appeal!

Just File Your Notice of Appeal!

February 27, 2020

Authored by: Mark Duedall

Generally, a notice of appeal of a bankruptcy-court order must be filed “within 14 days after entry of the judgment, order, or decree being appealed.” Fed. R. Bankr. P. 8002(a)(1). But what if a litigant’s motion for attorneys’ fees or costs incurred in connection with the judgment remains pending on the fourteenth day after entry? The First Circuit recently answered this question unequivocally: File the notice of appeal!

In In re Empresas Martínez Valentín Corp., No. 18-2103, 2020 U.S. App. LEXIS 2701 (1st Cir. Jan. 28, 2020), creditor PC Puerto Rico (“PCPR”) filed its notice of appeal 237 days after the fourteen-day deadline, waiting for the bankruptcy court to decide the Debtor’s motion for attorneys’ fees and costs incurred in litigating the adversary proceeding to judgment. PCPR argued that the notice of appeal was timely because: (i) the time for appeal did not begin until

Coronavirus and Distress – Do Your Contracts’ Force Majeure Clauses Cover You, Harm You, Mitigate Your Distress, Exacerbate Your Distress, or Warrant a Complete Overhaul?

February 3, 2020

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While no one can reliably predict the outcome, spread, or duration of the coronavirus outbreak, or its tragic human toll, its current effects on Asian and international supply chains are unprecedented.  The economic distress may be isolated in the coming weeks (and we pray that is the case, and for the human suffering to abate), or the distress could reverberate over the coming months, or longer.

If your own supply chain depends on Asian imports, or if you are part of a larger supply chain linked to or intertwined with Asia, then could force majeure be implicated?  Or could force majeure make things much worse for those depending on a reliable international supply chain?  Unfortunately, no contract clause may be less scrutinized during the drafting process than the force majeure provision.  Epidemic, pandemic, disease, quarantine, and the like are certainly included in what we may think is force majeure –

Bankruptcy Trustees Receive Early Holiday Present – a Circuit Level Win Against Colleges in the Tuition Clawback Cases

 

We here at the Global Restructuring & Insolvency Developments (GRID to our friends) have been following the tuition clawback wars for a few years – the cases in which a bankruptcy trustee sues a college to return tuition that the bankrupt parent paid for  their child when the parent was otherwise stiffing other creditors.  It is a textbook constructively fraudulent transfer because the parent(s) do not receive reasonably equivalent value (or anything, for that matter) for the payment of the kid’s tuition.  Our prior coverage is here and here.  (And for those of you who want to really geek out on this, here’s a video of an entire symposium panel on the topic, from our friends at the Emory Bankruptcy Developments Journal.)

Anywho, yesterday the First Circuit decided the long-awaited appeal in DeGiacomo v.

Distressed Step-In as a Remedy for UK Lenders

This article first appeared in Corporate Rescue & Insolvency, December 2018.

Key points

  • Step-in is a versatile tool which gives a lender the right, in certain circumstances, to step-in to a contract between a borrower and its contractual counterparty, and to perform the borrower’s part of the bargain to keep the contract alive.
  • It can have much less impact on the actual project or development than the commencement of formal insolvency proceedings, thereby minimising loss.
  • Step-in won’t be right for all situations (or for all lenders) and, where there is distress, additional risk factors need to be brought in to a consideration of the lender’s options.

Introduction

Step-in is a self-help remedy. It is a creature of contract and, in a finance structure, gives lenders the right, in certain circumstances, to step-in to a contract between a borrower and its contractual counterparty, and perform the borrower’s part of

The Stalking Horse Bid Protections: The Auction Credit Conundrum, and How to Avoid It

December 12, 2018

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The Scenario

You’re an investor kicking the tires on a company in bankruptcy. If you agree to be the “stalking horse” bidder, you’ll expend significant time and money vetting the opportunity (including attorneys’ fees, quality of earnings analysis, valuation and appraisal work, and site visits), only to possibly end up in a bidding war with others wanting a free ride on your due diligence.

To lure you in, the debtor offers you $250,000 in “Bid Protections” (total breakup fee and expense reimbursement) if you don’t win at auction. Not only that, you’ll get a credit toward your cash bid at the auction in the amount of the Bid Protections.  This makes sense, you think, because the economic value of a competing bid is deflated by the $250,000 in Bid Protections that must be paid to you if the competitor is ultimately successful.  So to compare the economic value of

SDNY Joins the Rush Party, Rules for Trustee in Another Child Tuition Clawback Case

We at the BCLP Global Insolvency and Restructuring Developments (the GRID) continue to watch and cover the growing jurisprudence of trustees seeking to recover pre-petition tuition payments made by a debtor parent to support his or her child’s college education.  Our prior posts can be found here and here.  And in February, the Emory Bankruptcy Developments Journal’s annual symposium will have a panel on this topic (contact me or Lynne, below, in a couple months and we will send you our materials).  Well, the party (or hangover??) continues.

Earlier today, Judge Glenn ruled that a debtor parent does not receive reasonably equivalent value, under either the Bankruptcy Code’s fraudulent transfer provisions or New York’s Debtor and Creditor Law, by paying for a adult child’s college tuition.  The opinion is In re Sterman, and if you have not followed this fascinating effort to transfer

Update – Our New and Improved Set of Opening Questions and Document Questions for Your Deposition

 

Way back in 2015, we published our first edition of the most comprehensive set of opening questions for your next deposition, including follow up matters, common procedural mistakes in depositions, and the 41 questions to ask about any pertinent document.  The response was positive, which we appreciate!  In light of other depositions of ours over the past three years, and changing practices among business people (including the pervasive use of texts for everything), and more recently, the use of text-and-email-destroying-applications, we gave this list an upgrade, and decided it to publish it again for your use.

We hope you find this useful, time saving, and helpful in getting to the truth of things in your next deposition – it is located here in MS Word so you can drop it into your next deposition script in as much detail as you want.

Check back again in a few weeks –

A Leap Forward for the Recognized Use of AI and Predictive Coding in Insolvency Trials and Investigations

August 22, 2018

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When the High Court of England and Wales handed down judgment in the case of Brown v BCA Trading Ltd, it marked what is believed to be the first test of technology assisted review (TAR) for disclosure at a full trial in England.  The technology is being used increasingly and, combined with recently-proposed changes to the English disclosure regime, could result in more legal cases becoming economically viable to fight and lead to greater recoveries for creditors.

TAR also has applications beyond litigation, which can be particularly useful for insolvency practitioners (IPs, as they are often called) appointed to a company who need to find out key information and secure assets quickly with limited funds.

The BCA judgment

In May 2016, Berwin Leighton Paisner won the first contested application for its client BCA to use predictive coding in Brown v BCA Trading Ltd [2016] EWHC 1464

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