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Creditors: Proceed with Caution on Involuntary Bankruptcy Filings

November 11, 2010

Authors

Bryan Cave

Creditors: Proceed with Caution on Involuntary Bankruptcy Filings

November 11, 2010

by: Bryan Cave

A recent Ninth Circuit Court of Appeals decision provides several clear messages regarding the dangers of poorly thought out involuntary bankruptcy petitions. In In re Southern California Sunbelt Developers, Inc., 608 F.3d 456 (9th Cir. 2010), the two debtors placed into involuntary bankruptcies won an attorney fee award of $745,000 and a punitive damages award of $130,000 against all 13 petitioning creditors.

Section 303(b) of the Bankruptcy Code provides the general rule that an involuntary chapter 7 or 11 case may be commenced “by three or more entities, each of which is either a holder of a claim . . . that is not contingent as to liability or the subject of a bona fide dispute as to liability or amount, or an indenture trustee representing such a holder, if such noncontingent, undisputed claims aggregate at least $13,475 . . .” more than the value of the underlying collateral (if

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October 2010 Client Alerts

November 2, 2010

Authors

Jeannie Osborne

October 2010 Client Alerts

November 2, 2010

by: Jeannie Osborne

IRS Has Announced its 2011 Cost-of-living Adjustments for Retirement Plans

On October 28 the IRS issued a press release announcing its 2011 cost-of-living adjustments for retirement plans.  For a chart reflecting the qualified plan limits for years 2008-2011, please click here to see the Employee Benefits & Executive Compensation Group’s Client Alert published October 28, 2010.

SEC Issues Proposed “Say-on-Pay” and “Golden Parachute” Rules

The SEC has released its proposed “say-on-pay” and related golden parachute rules to implement the provisions of Dodd-Frank set forth in new Section 14A of the Securities Exchange Act of 1934.  The comment period will close on November 18, 2010 and the SEC plans to issue final rules in early 2011.  For a discussion of the proposed rules, please click here to read the Bulletin published by the Corporate Finance and Securities Group on October 20, 2010.

Employee Benefits Provisions of the Small Business Jobs Act of 2010

On

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March 2010 Client Alerts

April 1, 2010

Authors

Jeannie Osborne

March 2010 Client Alerts

April 1, 2010

by: Jeannie Osborne

Third Circuit Rules Secured Lender Not Entitled to Credit Bid at Sale of Collateral Under a Cramdown Plan

On March 22, 2010, the Third Circuit in a split decision joined the Fifth Circuit in holding that a debtor may sell its assets under a plan of reorganization without permitting a secured lender to credit bid by offsetting its secured claim against the purchase price.  This decision may have major implications for secured lenders and may lead to more contested confirmation hearings and litigation over valuation.  For more information, please read the Client Alert published by the Bankruptcy, Restructuring and Creditors’ Rights Client Service Group on March 30, 2010.

Summary of the Federal Reserve Board’s Final Gift Card Rules

On March 23, 2010, the Federal Reserve Board issued its final rule, a summary and analysis of the final rule, and the official staff interpretation of the final rule in

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