Delaware Bankruptcy Court: No Implied Assumption Of Executory Contracts In Bankruptcy

The ability of a bankruptcy trustee or chapter 11 debtor-in-possession (“DIP”) to assume, assume and assign, or reject executory contracts and unexpired leases is an important tool designed to promote a “fresh start” for debtors and to maximize the value of the bankruptcy estate for the benefit of all stakeholders. However, the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure (“Bankruptcy Rules”) establish strict requirements for the assumption, assignment, and rejection of contracts […]

By | January 27th, 2022 ||

What To Do When Your Franchisee Files For Bankruptcy

With the economic downturn caused by COVID-19, many expected a tidal wave of commercial bankruptcy filings. After an initial spike of retail bankruptcy cases at the outset of the pandemic, the onslaught of bankruptcy has not yet materialized. Whether due to PPP loans, other available credit, modification and forbearance agreements, or government moratoriums on foreclosure and eviction proceedings, many businesses have been able to temporarily avoid debt obligations without the need to file for […]

By | January 17th, 2022 ||

Delaware Bankruptcy Court Rules That Unsecured Creditors Of A Solvent Debtor Are Entitled To Post-Petition Interest At The Federal Judgment Rate, Not The Default Interest Rate

On December 22, 2021, Judge Mary Walrath of the Bankruptcy Court for the District of Delaware held in In re The Hertz Corp. that redemption premiums may potentially qualify as unmatured interest, and that, to the extent that such redemption premiums are unmatured interest on unsecured debt, then creditors would only be entitled to receive the federal judgment rate, not the contractual rate of interest.1 The decision departs from a recent decision from the Texas bankruptcy court […]

By | January 7th, 2022 ||