An alert written by partner Chris Winter in Wilmington and special counsel Drew McGehrin in Philadelphia was republished in The Banking Law Journal. The alert— “Bankruptcy Court Finds Oversecured Creditor Not Entitled to Recovery of Post-Petition Attorneys’ Fees”— analyzed the U.S. Bankruptcy Court for the Eastern District of Tennessee’s ruling in In re Brandt, which held that an oversecured creditor did not have an allowed claim for post-judgment expenses, including attorneys’ fees, incurred after the bankruptcy petition was filed.
Stay Tuned – Bankruptcy Court Grants Stay of Case Dismissal but Requires $3.3 Million Bond
By Robert E. Grossman and Brad Lenox
In In re Endi Plaza LLC, the Bankruptcy Court for the Southern District of New York granted a stay pending an appeal of its prior order dismissing a bankruptcy case for bad faith but required the debtor to post a bond of more than $3 million during the pendency of the stay period. This decision is instructive for secured creditors that have been frustrated in their efforts to exercise state law rights by the filing of a bankruptcy case.
When Can a One-Letter Mistake Written Before a Bankruptcy Cost $500,000 After?
By Catherine Beideman Heitzenrater and Marie Bauer
In East Texas Machining & Manufacturing, LLC v. STV Engine 011, LLC, et al., the United States Bankruptcy Court for the Eastern District of Texas considered a motion for partial summary judgment filed by plaintiff-debtor East Texas Machining & Manufacturing LLC against STV Engine 001 LLC, Axle Box Innovations LLC and Texas Tactical Machining & Manufacturing LLC in an adversary proceeding within ETMM’s Chapter 11 bankruptcy case. The court granted ETMM’s motion based on a one-letter mistake in STV’s UCC-1 financing statement and found that STV’s $500,000 security interest was unperfected and therefore invalid and avoidable.
Duane Morris Partners Named to 2026 Lawdragon 500 Leading Global Bankruptcy & Restructuring Lawyers Guide
Five Duane Morris LLP attorneys have been named to the 2026 Lawdragon 500 Leading Global Bankruptcy & Restructuring Lawyers guide.
Morris S. Bauer – Bankruptcy, Creditors’ Rights
James Billingsley – Bankruptcy, Restructuring, Litigation
Robert Grossman – Corporate, Reorganization, Litigation
Meagen Leary – Creditors’ Rights, Real Estate Finance, Bankruptcy
Wendy M. Simkulak – Bankruptcy, Reorganization, Creditors’ Rights
Read more about the attorneys named by Lawdragon 500 on the Duane Morris LLP website.
Bankruptcy Court Provides Guidance on Adequate Assurance of Future Performance in Sale of Distressed Real Estate
By Marcus O. Colabianchi and Hunter C. Blume
Recently, the U.S. Bankruptcy Court for the Southern District of New York confirmed the Chapter 11 plan of liquidation for Broadway Realty I Co. LLC and affiliated debtors and approved the sale of a large portfolio of rent-stabilized residential properties to Summit Gold Inc., overruling objections by the City of New York. The decision provides guidance on the limits of housing-based objections and clarifies how bankruptcy courts may apply the “adequate assurance of future performance” standard to large, distressed residential portfolios.
Read the full Alert on the Duane Morris LLP website.
You’ve Got to Have Faith When Purchasing Bankruptcy Sale Assets, as Appellate Panel Widens Section 363(m) Protection
By Jessica Kenney Bonteque and Nathan Yeary
Section 363(m) of the Bankruptcy Code protects purchasers of assets in a bankruptcy sale. The rule protects a bankruptcy sale as long as the effectiveness of the order from the bankruptcy court approving the sale is not stayed pending resolution of an objection and the purchaser acts in “good faith.” A recent decision by the Bankruptcy Appellate Panel for the Eighth Circuit extends the protection afforded under Section 363(m) by permitting a purchaser’s “good faith” to be implied from the absence of evidence that the purchaser acted in “bad faith.” However, the dissent concluded that the absence of evidence that a purchaser lacks good faith is insufficient to support an inference of good faith.
Read the full Alert on the Duane Morris LLP website.
Structurally Unsound: District Court Reverses Bankruptcy Court on Good-Faith Transferee’s Defense Based on Value Provided to Chapter 7 Debtor’s Affiliate
By Catherine Beideman Heitzenrater and Nathan Yeary
The United States District Court for the Southern District of New York recently addressed a transferee’s attempt to use corporate veil-piercing to defend against an avoidance action by a Chapter 7 trustee. The transferee-defendant argued that its potential liability for a challenged payment from the debtor could be offset by the value that it had provided to the debtor’s nondebtor affiliate. The Bankruptcy Court for the Southern District of New York dismissed the trustee’s action and agreed with the transferee-defendant that a nondebtor special purpose vehicle formed to acquire and hold real estate for the debtor was the debtor’s alter ego. The District Court reversed on appeal and concluded that the transferee did not have a reasonable equivalent value defense based on consideration provided to the special purpose vehicle, nondebtor affiliate of the debtor in exchange for a downpayment from the debtor.
Freeze! Lapsed Financing Statement May Not Be Fatal in Bankruptcy
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.
Bankruptcy Case Derailed by Debtor’s Own Corporate Governance Agreement
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.
Court Finds a Commercial Tort Claim, Giving IRS Tax Lien Priority
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.