A classic retainer becomes property of the law firm immediately upon payment to the extent permitted by state law. If, after that payment is made, the client commences a bankruptcy case, the payment, to the extent it is properly characterized as a classic retainer, remains property of the law firm and is not property of the…
In a recent decision, the Ninth Circuit Court of Appeals held that a debtor-attorney could not use the unclean hands doctrine to render dischargeable a former client’s claim based on the lawyer’s misappropriation of funds entrusted to him by the former client. See Northbay Wellness Group, Inc. v. Beyries, No. 13-17381 (9th Cir. June 5, 2015).…
The Bankruptcy Court for the Eastern District of Pennsylvania (the Honorable Jean K. FitzSimon presiding) recently declined to decide whether a chapter 13 debtor can be granted standing to prosecute a fraudulent transfer claim on behalf of its estate under Official Committee of Unsecured Creditors of Cybergenics Corp. v. Chinery, 330 F.3d 548 (3d Cir. 2003)…
On May 27, 2015, the Department of Labor published new Family Medical Leave Act notices and medical certification forms.
In Bank of America v. Caulkett, the Supreme Court decided by unanimous decision on June 1 that a debtor in a Chapter 7 proceeding may not avoid a junior mortgage under section 506(d) of the Bankruptcy Code even where the debt owed on the senior mortgage exceeds the value of the debtor’s collateral. Section 506(d) provides…
A recent opinion of the Delaware Court ofChancery, Calma v. Templeton, has broughtrenewed attention to the issue of directorcompensation. The opinion holds that directorcompensation decisions may not be subject tothe presumption of the business judgment rule,but may instead be reviewed under the entirefairness standard. However, it also addresses thecircumstances under which stockholder ratification of director compensation…
In October 2014, leading corporate governance practitioners from around the UnitedStates convened at the biennial Delaware Business Law Forum, along with current andformer jurists of the Delaware Supreme Court and Court of Chancery, to discuss and debatedeveloping topics in corporate governance. Participants also included representativesof “activist” investors, institutional investors, public company directors and those who advisethem,…
The Fifth Circuit Court of Appeals recently decided (by decision entered on May 28, 2015) that the Barton doctrine (which requires a plaintiff that wants to sue a trustee to seek leave of the court that appointed such trustee) applies irrespective of whether the underlying claims at issue are claims over which the bankruptcy court…
In In re Cornerstone Therapeutics Inc. Stockholder Litigation, the Delaware Supreme Court resolved two consolidated interlocutory appeals.
This Practice Note discusses the use of bankruptcyremote entities in commercial real estatetransactions, including different types of bankruptcyremote entities, the separateness provisions oftenrequired by lenders and the consequences ofsubstantive consolidation. This Note discusses thefundamentals of using a bankruptcy remote entityto purchase real estate, including the reasons aninvestor may be required to establish a separateentity to purchase…