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The initial wave of post-COVID Chapter 11 business bankruptcies has revealed an increasing tendency for senior executives of financially distressed companies to award themselves substantial bonuses compensation immediately before placing their companies into bankruptcy. If this trend continues, it may largely nullify the efforts of Congress and the courts to rein in and strictly regulate such actions. READ MORE
Breaking from the overwhelming majority of prior case law, two bankruptcy courts recently held that Medicare and Medicaid provider agreements can be assigned as part of a Section 363 bankruptcy sale free and clear of the assignor’s liabilities under the provider agreements, including amounts due or that may become due under the Provider Agreement for pre-assignment activities. READ MORE
If a secured creditor mistakenly releases its lien, it should correct the error as soon as possible. A recent decision from the U.S. Court of Appeals for the Seventh Circuit implies if the secured creditor is diligent, it may not be harmed by the inadvertent release, even if the borrower files for bankruptcy. READ MORE
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