Shumaker Manufacturing

A Legal & Industry Review


INSOL Europe Annual Congress 2017

On October 6, 2017, I was honored to participate in the INSOL Europe Annual Congress 2017 in Warsaw as moderator of a panel discussion that included professionals from the UK, Romania, Sweden and Poland, on the topic of “Critical Insolvency Issues Facing Companies Dealing with Customers and the Supply Chain”.  INSOL Europe is a premier association of insolvency professionals with more than 1,200 members across Europe and beyond.

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David Conaway is the Chair of Shumaker’s Bankruptcy and Insolvency Practice, Co-Chair of Shumaker Manufacturing, and Co-Chair of Shumaker Global, where he advises clients with respect to customers and the supply chain, including insolvencies or restructurings; commercial contracts and business transactions; and international transactions, disputes and insolvencies; and commercial and contract litigation.


Recent Article on the Nuts and Bolts of Section 503(b)(9) Claims in Chapter 11 Cases

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The so-called 20-day administrative priority claim (set forth in Section 503(b)(9) of the Bankruptcy Code) is perhaps the best remedy available to vendor creditors in Chapter 11 cases.

In 2005, Congress amended the U.S. Bankruptcy Code and added Chapter 15 (cross-border insolvency), and the game-changing Section 503(b)(9) claim, which functionally eclipsed the reclamation claim. At its essence, Section 503(b)(9) claims allow vendors to convert a portion of their pre-petition claims (arising from goods delivered within 20 days prior to filing) from near valueless general unsecured claims to administrative priority claims, which are generally paid in Chapter 11 cases. Section 503(b)(9) claims have had a major impact on Chapter 11 cases because they add a significant financial obligation that must be paid. Naturally, Chapter 11 debtors and their lenders have challenged such claims to minimize the financial impact of Section 503(b)(9). Since 2005, there have been a number of reported and unreported cases that provide guidance on successfully utilizing the remedy.

Below is an excellent article by my partner David Grogan on the nuts and bolts of Section 503(b)(9) claims in Chapter 11 cases.

We hope you find this useful and informative. Please contact us if you have any questions about this, or any other matter.

The Chapter 11 Vendor Game Changer: Section 503(b)(9) Claims

 


United States Supreme Court Limits Sanctions Against Tire Manufacturer in Goodyear Tire & Rubber Co. v. Haeger (April 18, 2017)

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In Goodyear Tire & Rubber Co. v. Haeger, plaintiffs asserted a products liability claim against Goodyear for a tire failure. The parties entered into a settlement agreement, after which plaintiffs discovered that Goodyear did not disclose internal testing reports that were responsive to discovery requests prior to the settlement. Continue reading


German Reform of Avoidance in Insolvency

I am pleased to share a great article on the recent reform of German insolvency law regarding avoiding pre-insolvency transactions by my good friend and colleague Annerose Tashiro, a leading cross-border insolvency specialist in Germany. This is important in the event a contract counter-party becomes insolvent in Germany. Also, German avoidance laws are likely applicable should an insolvent German company also file a Chapter 15 proceeding in the U.S.

Continue reading