We decided to create this blog to highlight recent developments in the field, discuss significant milestones and share some of our insights. This blog is for informational purposes only and is not intended to provide legal advice. In Kern, trustees of funds affiliated with a Sheet Metal Workers local brought suit in the bankruptcy court against the principal owner of a closely-held sheet metal company that went out of business owing contributions to the funds. §523(a)(4), provides that an individual’s debt “for fraud or defalcation” will not be discharged in bankruptcy if committed while the debtor was “acting in a fiduciary capacity.” First, the judge found that the monies taken from employee paychecks constituted assets of the vacation fund, citing a Department of Labor regulation defining benefit plan assets to include amounts a plan participant “has withheld from his wages by an employer.” 29 C. The proposed structured dismissal violated the Code’s priority rules because it gave a distribution to the unsecured creditors but gave nothing to the employees with the priority wage claim. In a March 22, 2017 decision, the Supreme Court reversed. Finally, how should courts reconcile the language in subsection (ii) that administrative status may attach “without regard … 2012) (finding employees not to be insiders but providing a discussion of the factors relevant to the analysis). Outside of bankruptcy, the National Labor Relations Act (NLRA) requires an employer to maintain the status quo established by the terms and conditions of employment in an expired collective bargaining agreement until it and the union have bargained to impasse.
The blog should not be used as a substitute for competent legal counsel by a licensed attorney. The local’s collective bargaining agreements with the company required it to pay a defined dollar amount each month to a fund for employees’ vacations. Nonetheless, the bankruptcy court approved the settlement over the employees’ objection, and dismissed the case pursuant to its terms, reasoning that, without the settlement, creditors other than the secured creditors would most likely have received nothing. Without expressing a view on whether structured dismissals in general are lawful, the Court prohibited those that, over the objection of an affected party, contravene the Code’s priority scheme. Cautioning about a too-literal reading of the word “and,” the bankruptcy court in Philadelphia Newspapers pointed out that Section 503(b) ties together with the word “and” all nine different categories of administrative claims, including such diverse items as taxes, professional fees and the cost of closing a health care business. 2008), tried to pin that down by holding that back pay is “attributable” to a post-petition period if the claim vests or accrues post-petition. to whether any services were rendered” with the overarching language in Section 503(b)(1)(A) that defines administrative expenses as those needed for “preserving the estate.” The bankruptcy court in Calumet recently relied on the latter language in concluding that a back pay claim can only be administrative if the employee performed post-petition service to the bankrupt estate. Remember that the debtor, as proponent of the plan, bears the burden of proving compliance with Section 503(c). Successfully challenging a KEIP thus often requires scrutinizing the performance metrics that would trigger bonuses, looking for evidence that an executive may stand to reap an award without extraordinary effort. Debtors in bankruptcy have sought to reject expired agreements to avoid this obligation.
One year later, Robert Horton, CEO of Alchemix, entered into an investment deal with Western Oil Sands (“Western”) in which Western committed to an initial million investment in Alchemix with the option to invest an additional million.
Horton spoke with Weiss and assured him that Western's investment of the additional million would be a “certainty” if Strategic accepted early repayment of the Alchemix loan, relinquished its security interest in the patents, and gave up Weiss' board seat.
331 when they receive the liquidation proceeds in exchange for their stock.
If the corporation distributes its assets for later sale by the shareholders, the assets generally “come out” of the corporation with a basis equal to FMV (and with the related recognition of gain or loss under Sec.
MEMORANDUM*In June 2001, Kenneth Weiss loaned Alchemix Corporation (“Alchemix”) 0,000 through his investment company, Strategic Diversity, Inc. In return, Alchemix granted Strategic a security interest in its patents and gave Weiss a seat on the Alchemix board of directors. Representation of Fortune 500 Real Estate Investment Trust (REIT) in multi-million easement dispute against adjoining condominium association in Los Angeles Superior Court, resulting in favorable settlement to client including recovery of easement rights and significant monetary damages.Representation of Fortune 500 Real Estate Investment Trust in commercial breach of contract & construction dispute against contractors, architects and project managers in Los Angeles Superior Court, resulting in favorable settlement to client including recovery of monetary damages and waivers of fees and expenses.Michael Weiss is a partner in the Litigation Practice Group with more than 20 years of experience handling complex commercial litigation.Michael focuses his practice on real estate litigation, commercial and business disputes, and complex insurance insolvency matters.