New Article Looks At BAPCPA's Impact On Retailers In Chapter 11

Posted on February 23, 2009 by Bob Eisenbach

My colleagues Lawrence C. Gottlieb, Michael Klein, and Ronald R. Sussman recently authored an article entitled "BAPCPA's Effects on Retail Chapter 11s Are Profound," in the February 2009 edition of the The Journal of Corporate Renewal, published by the Turnaround Management Association. You can access a copy of the article by clicking on its title in the prior sentence.

What's their assessment of the impact of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (known as BAPCPA) on retailer Chapter 11 bankruptcies? Here's an excerpt:

BAPCPA’s numerous creditor-friendly amendments and modifications have profoundly impacted the Chapter 11 process, to the point that it is nearly impossible for retailers to reorganize, regardless of the prevailing national and international economic conditions.

Time and again in the three years since its enactment, BAPCPA has significantly impaired the ability of retailers to obtain the necessary post-petition financing and breathing room from creditors to test and implement a reorganization strategy, regardless of the debtor’s capital structure, the fluctuating state of the credit markets, or the extent to which they compete with large discount retailers like WalMart or online retailers like Amazon.

The article details several of the critical changes BAPCPA made, their effect on retailers, and how the timing of a bankruptcy filing is often critical for a retailer to have any chance of trying for a going concern sale to avoid complete liquidation through going out of business sales.

The Cooley Bankruptcy & Restructuring Group, which Lawrence Gottlieb chairs, is representing official committees of unsecured creditors in many high-profile national and regional retail bankruptcies, including Steve & Barry’s, The Bombay Company, Hancock Fabrics, Lillian Vernon, The Sharper Image, Mervyns, Shoe Pavilion, Boscov’s and Goody’s. The article, drawn from these recent experiences, is important reading for retailers, creditors, and insolvency professionals alike.

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Free Online Bankruptcy Research Tool Now Updated

Posted on February 16, 2009 by Bob Eisenbach

Last year I posted about the research binder that Chief Judge Randall J. Newsome of the United States Bankruptcy Court for the Northern District of California makes available to bankruptcy professionals and the public. Well, Chief Judge Newsome has now updated his binder as of February 5, 2009, covering cases through Volume 395 of Bankruptcy Reports. Follow the links in this sentence to access the entire binder in PDF format and the HTML version organized by topic. The PDF version is capable of being searched using a key word or phrase.

The primary focus of the research binder is on Ninth Circuit law given that Chief Judge Newsome presides in the Northern District of California, but some out-of-circuit law is also included. The disclaimer Chief Judge Newsome includes puts the binder's use in context:

The following list of cases and supplemental information is presented for informational and educational purposes only. Though it represents the aggregation of 19 years of research, the Court makes no claims as to its current level of accuracy. Some of the cases set forth may very well have been superseded, reversed, or otherwise may no longer be good law. The Court has posted it with the intention to educate and assist those who may find it helpful. Accordingly, users should consider it a first, but by no means final, research tool, and should cite check all cases listed herein for continued viability prior to relying on such cases in practice.

With those comments in mind, the binder can be a very helpful place to start when researching bankruptcy law issues in Ninth Circuit.

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