This blog publishes articles and updates focused on bankruptcy law, restructuring matters, creditor and debtor considerations, court decisions, and procedural developments that affect businesses and individuals navigating financial distress.

Content includes practical analysis of case outcomes, regulatory changes, and emerging trends, as well as perspectives from legal practitioners on how bankruptcy and insolvency issues are addressed in real-world scenarios.

November 2008

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Amendments To The Federal Bankruptcy Rules Take Effect December 1, 2008

Nearly every year, changes are made to the Federal Rules of Bankruptcy Procedure — the ones that govern how bankruptcy cases are managed — to address issues identified by an Advisory Committee made up of federal judges, bankruptcy attorneys, and others. This year’s amendments to the national bankruptcy rules take effect on December 1, 2008. 

Business Bankruptcy Rule Changes. Unlike the more substantive modifications made last year (discussed here), this year’s amendments make a host of relatively smaller, but still important, changes. The most notable ones for business bankruptcy cases involve privacy concerns. New rules have been put in place to protect patients when health care businesses file for bankruptcy while others govern the proposed sale or transfer of personally identifiable information by any type of business. Separate rule changes implement provisions of Chapter 15 (the Bankruptcy Code’s cross-border and international insolvency chapter), address a range of issues in small business Chapter 11 cases, grant courts more flexibility in giving notice to foreign creditors, introduce various consumer bankruptcy procedural changes, and establish a process to allow some bankruptcy court decisions to be appealed directly to the U.S. Court of Appeals.

Interim Bankruptcy Rules Being Replaced. These rules also replace the interim bankruptcy rules that have been in place for the past few years following the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (known as BAPCPA). Some bankruptcy courts, such as the District of Delaware and the Southern District of New York, have already issued general orders retracting the effectiveness of the interim rules effective as of December 1, 2008.

Rules Of The Road. At a time when the financial crisis is likely to push more and more companies into Chapter 11, bankruptcy attorneys and other insolvency professionals will want to review the rule changes closely to make sure they are following the most current version of the Federal Rules of Bankruptcy Procedure. For debtors, creditors, and other parties, this year’s rule amendments should help make management of Chapter 11 bankruptcy cases more consistent with BAPCPA’s changes and, potentially, a more efficient process.

Fall 2008 Edition Of Bankruptcy Resource Is Now Available

The Fall 2008 edition of the Absolute Priority newsletter, published by the Cooley Godward Kronish LLP Bankruptcy & Restructuring group, of which I am a member, has just been released. The newsletter gives updates on current developments and trends in the bankruptcy and workout area. Follow the links in this sentence to access a copy of the newsletter or to register to receive future editions. You can also subscribe to the blog to learn when future editions of the Absolute Priority newsletter are published, as well as to get updates on other bankruptcy topics.

The latest edition of Absolute Priority covers a range of cutting edge topics, including:

  • Claims and defenses under the WARN Act;
  • The Supreme Court’s decision on transfer taxes and bankruptcy sales;
  • Section 363 "free and clear" sales in bankruptcy; and
  • The interplay between claim objections and the Section 503(b)(9) "20 day goods" administrative claim.

This edition also has information on some of our recent representations of official committees of unsecured creditors in Chapter 11 bankruptcy cases involving major retailers. These include Mervyn’s, Boscov’s, Hancock Fabrics, Steve & Barry’s, Goody’s, Sharper Image, The Bombay Company, and Shoe Pavilion, among others. In addition, a note from my partner Adam Rogoff, the editor of Absolute Priority, discusses how the current economic problems will require lenders, unsecured creditors, and others to consider the impact of Chapter 11 bankruptcy on their rights.

I hope you find this latest edition of Absolute Priority to be a helpful resource.