GCK On Law
Are Option Agreements Executory Contracts under Section 365?
The Bankruptcy Code does not provide a definition of the term “executory contract.” The majority of courts apply the “Countryman test” to determine if a contract is executory, which provides that a contract is executory if the obligations of both the debtor and the...
Conflict in Application of Sections 506(1) and 1129(b)(2)(A)(iii) in Dirt for Debt Valuation
Section 1129 of the Bankruptcy Code governs confirmation of a Chapter 11 plan. Section 1129(b) of the Bankruptcy Code allows for confirmation of a plan over a creditor’s objection as long as certain requirements are met. One such requirement for cramdown is that the...
Tests to Determine Whether a Bankruptcy Court Retains Post Confirmation Jurisdiction Over Disputes
Under 28 U.S.C. §1334, a federal district court has original jurisdiction over “all civil proceedings arising under title 11, or arising in or related to cases under title 11.” Significantly, Section 1334 does not distinguish between a court’s pre-confirmation and...
Adequate Protection of a Secured Creditor Through Use of Equity Cushion
For an oversecured creditor, a creditor with collateral that has a greater value than the amount of the creditor’s allowed secured claim, case law has established that the existence of an equity cushion may, in and of itself, constitute adequate protection, provided...
Conflict as to Whether New Value Under Section 547(c)(4) Must Remain Unpaid
Actions to avoid preferential transfers under Bankruptcy Code 547(b) are subject to certain defenses and limitations, including the ‘new value’ defense of Section 547(c)(4) which provides as follows: The trustee may not avoid under this section a transfer - to or for...