“Hot Off the Press – Preference and KERP Developments under BAPCPA”?
by: David Conaway
Shumaker, Loop and Kendrick, LLP; Charlotte, N.C.
There appears to be a showdown brewing in the U.S. Bankruptcy Court for the Southern District of New York, and the 2005 amendments to the Bankruptcy Code will be front and center.
As was widely reported in 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), among other things, severely limited a chapter 11 debtor’s ability to pay retention and severance payments to management. Prior to the effective date of BAPCPA (cases filed on or after Oct. 17, 2005), payments to management pursuant to a key employee retention plan (KERP) were common in virtually all large chapter 11 cases.
Unfair Discrimination: Emerging Trend Creates New Means of Contesting Confirmation
by: Douglas E. Wedge
Moore & Van Allen PLLC; Charleston, S.C.
Section 1129(b) of the Bankruptcy Code is known as the “cramdown” provision. If a chapter 11 reorganization plan satisfies all of the confirmation requirements set forth in §1129(a), except for obtaining the acceptance of all classes or having unimpaired classes under the plan, a debtor can confirm a plan provided it does not discriminate unfairly among each class of claims or interests that is impaired and has not accepted the plan. The Code does not define “unfair discrimination,” but two tests have been developed to harness this concept and ensure that creditors are treated fairly. This concept is as important as the constituency of general unsecured creditors in a given case and can represent widely varying types of claims – trade creditors that provided goods and services to the debtor, personal-injury claimants seeking damages from the debtor and undersecured creditors whose collateral has left them exposed with an unsecured claim, to name a few.
Agenda for the 2006 Winter Leadership Conference
The Unsecured Trade Creditors' Committee, the Creditors' Committee Task Force and the Reclamation Task Force will conduct a joint presentation on Friday, Dec. 1, 2006, from 3:45 p.m. to 5:15 p.m. on the status and implementation of statutory changes in light of BAPCPA. Participants will include Creditors' Committee Task Force Chair Judith Greenstone Miller, Reclamation Task Force Chair Paul Sinclair, Hon. Joan Feeney (Bankr. D. Mass.), Adrienne Murphy, Ted Gavin, Bruce Nathan and Deborah Thorne. The joint presentation will discuss and analyze creditor committee composition (constitution and reconstitution), enhanced statutory duties and responsibilities of creditors' committees, creditor committee protocols and information sharing, handling demands for information and documents by creditors, conflicting agendas of creditors, solicitation of comments from creditors, reclamations and new §503(b)(9) administrative claims, the interplay with preferences and §502(d), application of the "new value" defense, a survey of current practices for reclamation claims in post-BAPCPA cases, and local rules governing such issues. Register for the Winter Leadership Conference!