By James Billingsley and Drew S. McGehrin
A lapsed financing statement may not extinguish a creditor’s secured position in a bankruptcy case, according to the recent decision Utah Bankruptcy Court styled Thomson v. Short (In re Short). Secured lenders are nevertheless well advised to monitor and timely file continuation statements under any circumstances, especially in the case of a borrower bankruptcy.
A recent decision from the U.S. Bankruptcy Court for the Northern District of Illinois in In re 301 W North Avenue, LLC, 666 B.R. 583 (Bankr. N.D. Ill. 2025) highlights the importance of following proper corporate authorization in bankruptcy filings. The bankruptcy court dismissed a Chapter 11 bankruptcy case for “cause” under Section 1112(b) of the Bankruptcy Code on the grounds that the debtor failed to obtain the requisite independent manager’s consent in accordance with the debtor’s own internal, corporate governance agreement.
Read the full Alert on the Duane Morris LLP website.
In Sunz Ins. Co. v. Internal Revenue Service (In re Payroll Management, Inc.), 125 F.4th 1035 (11th Cir. 2025), the United States Court of Appeals for the Eleventh Circuit held that a debtor’s claim for economic damages qualified as a “commercial tort claim” under Article 9 of the Uniform Commercial Code at the time the IRS’s tax lien attached to the claim and was perfected. As a result, the IRS’s lien had priority over a competing lienholder’s claim.
Read the Alert on the Duane Morris LLP website.
In In re Serta Simmons Bedding, L.L.C., No. 23-20181, 2024 WL 5250365 (5th Cir. Jan. 21, 2025), as revised (Jan. 21, 2025), the Fifth Circuit Court of Appeals held that the controversial “uptier transaction” undertaken by Serta Simmons Bedding and affiliates in 2020 did not qualify as an “open market purchase” under the terms of its credit agreement, and thus was not permitted. The Fifth Circuit remanded certain aspects of the case back to the U.S. Bankruptcy Court for the Southern District of Texas.
Read the Alert on the Duane Morris LLP website.
Skip DiMass and Diane Kim wrote for The Legal Intelligencer on commercial leases and the damage calculation in the bankruptcy process.
In In re East Penn Children’s Learning Academy, (Bankr. E.D. Pa. Dec. 3, 2020), the U.S. Bankruptcy Court for the Eastern District of Pennsylvania made clear that Section 502(b)(6) of the Bankruptcy Code provides a statutory limitation—rather than a formula for the calculation—of a landlord’s actual damages in the event of its tenant’s breach.
To read the full article, please visit the Duane Morris LLP website.
Skip DiMassa and Malcolm Bates wrote for The Legal Intelligencer on debtors’ contractual obligations.
In In re Brick House Properties, Bk. No. 20-26250, (Bankr. D. Utah June 11, 2021), the U.S. States Bankruptcy Court for the District of Utah denied a debtor’s motion to reject its prepetition contract for the sale of real property under Section 365 of the Bankruptcy Code. The bankruptcy court found that because the debtor was already subject to a state court-specific performance order compelling it to take the ancillary steps necessary to close the sale, the contract was no longer executory and could not be rejected.
To read the full article, please visit the Duane Morris LLP website.
Duane Morris partner Jarret P. Hitchings authored the INSOL World journal article, “Is Chapter 15 Available to a Cannabis MSO? In the Face of Uncertainty, Tread Lightly.”
On 31 March 2021, the State of New York legalized the use, possession, and growth of cannabis by adults. Within the United States, cannabis is now legal in 16 states including Washington D.C., with legalization taking effect in two more states, Virginia and New Mexico, later this year. This state-level trend toward legalization in the United States continues even though cannabis remains illegal at the federal level. However, in Canada, cannabis has been legal at both the federal and provincial levels since 2018.
To read the full article, please visit the Duane Morris website.
