AUGUST 23, 2017
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Bankruptcy & Restructuring News
In house attorneys looking for a better way to organize, vet and easily retrieve legal news created the National Law Review on-line edition.

Around the clock, the National Law Review's editors screen and classify breaking news and analysis authored by recognized legal professionals and our own journalists.

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On August 4, 2017, the Third Circuit Court of Appeals issued its ruling in Varela v. AE Liquidation, Inc. (In re AE Liquidation, Inc.), 2017 U.S. App. LEXIS 14359 (3d Cir. 2017), holding that WARN Act liability is triggered only when a mass layoff becomes probable – “that is, when the objective facts reflect that the layoff was more likely than not.” In doing so, the Third Circuit joined the Fifth, Sixth, Seventh, Eighth and Tenth Circuits, which have unanimously adopted this heighted standard as well.   More on WARN Act Liability Here >
Section 503(b)(9) of the Bankruptcy Code (11 U.S.C. §503(b)(9)) provides a special administrative priority claim for someone that supplies goods to a debtor in the 20 day period before the bankruptcy filing, but is unpaid as of the date of the filing. This is a meaningful priority. Administrative priority claims, which are on par with the claims of other post-petition service providers, like the debtor’s professionals, must be paid in full at the time of the confirmation of a plan, in order for a plan to be confirmed. Reliance on the priority provided by Section 503(b)(9) of the Bankruptcy Code can serve as an important alternative to suppliers who might otherwise be forced to seek to exercise state law rights of reclamation under the Uniform Commercial Code after a customer receives their goods – claims which can clash, often unsuccessfully for the supplier, with the rights of secured lenders.  More on Recent Case Law on Claims of Unpaid Suppliers in Bankruptcy Here >
On July 31, 2017, the Bankruptcy Court for the Southern District of New York recognized a Russian insolvency proceeding as a foreign main proceeding under chapter 15 of the U.S. Bankruptcy Code (“Code”), concluding that (i) a retainer deposited with the debtor’s attorneys in the U.S. was sufficient property within the United States to establish jurisdiction over a debtor under section 109(a) of the Code and (ii) the Russian insolvency proceeding was not “manifestly contrary to public policy of the United States.”   Get More Details on Russian Bankruptcy Proceedings Here >
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