Companies facing financial difficulties often utilize Chapter 11 to help effectuate a restructuring or sale as part of a case filed in the United States Bankruptcy Court. In other instances, a company’s lender – impatient with a company’s efforts to respond to financial challenges – may apply to a United States District Court for appointment of a federal receiver for the company.
The appointment of a federal receiver is an extraordinary remedy allowed only after a judicial finding that such a step is clearly necessary to protect a lender’s interest in its collateral. Continue Reading
At its recently concluded annual meeting, the Uniform Law Commission (ULC) voted final approval of the Uniform Assignment for Benefit of Creditors Act (“Act”).
Set forth below is a short discussion of “ABCs” as they currently exist, the ULC’s effort to bring uniformity to ABCs going forward and next steps to reform the law governing this common non-bankruptcy alternative for dealing with distressed companies.
ABCs
In the United States, there are several types of legal proceedings that can be invoked to address an insolvency situation. The most well-known procedure is ... Continue Reading
Our previous report on the Chapter 11 case of 23andMe discussed the Sale Order entered by the Bankruptcy Court on June 27, which approved the proposed sale of substantially all of the assets of the company. We noted that given “the numerous objections to the sale process it will be interesting to observe whether any party seeks and obtains a stay.”
Just days after that update, the State of California sought to stay entry of the Sale Order at least as far as made applicable to the residents of California.
The Bankruptcy Court held a hearing on the request on July 7, 2025. At that hearing ... Continue Reading
Last month Restructuring Perspectives highlighted crucial issues at the intersection of privacy and distress presented by the Chapter 11 case of 23andMe. Specifically, “Data for Sale” discussed the recent appointment of a “Consumer Privacy Ombudsman” (CPO) charged with assisting the Court in its consideration of the facts, circumstances, and conditions of the company’s proposed sale of personal consumer data.
The ensuing weeks were full of activity. The CPO filed his report (CPO Report) with the United States Bankruptcy Court on June 11. Then, after authorizing the ... Continue Reading
What happens to sensitive personal information shared by consumers when the company collecting that information encounters financial distress? That exact issue is currently front and center in the Chapter 11 proceedings of 23andMe.
23andMe, of course, pioneered widespread access to human genetic information. Over the past two decades, the company has provided consumers with access to testing kits for insight into personalized genetic traits. Such data is valuable not only to individuals submitting the information but also, on an aggregate basis, to research companies ... Continue Reading
In the latest twist in the ongoing Corporate Transparency Act (“CTA”) and beneficial ownership information (“BOI”) reporting requirements saga, news[1] came from Washington on March 21, 2025, that the Financial Crimes Enforcement Network (“FinCEN”) issued the previously promised interim final rule (“IFR”). The IFR removed the prior March 21, 2025, deadline for all reporting companies, and imposed a new deadline of April 25, 2025, only for foreign reporting companies. See 31 C.F.R. § 1010.380.[2]
Revised Reporting Deadline for Foreign ... Continue Reading
Heidi J. Sorvino, Chair of White and Williams' Financial Restructuring and Bankruptcy Practice and Managing Partner of the New York Office, and Associates, Andrew E. Arthur and Michael Ingrassia, recently co-authored “The $7.5 Million Subchapter V Debt Limit Should be Reinstated," published by the American Bankruptcy Institute Journal. The article detailed a few reasons why restructuring professionals have urged Congress to reinstate the elevated debt limit and the benefits that could stem from this increase.
Click here to read the article.Continue Reading
Stay tuned – another shoe is likely to drop from Washington D.C. on the CTA (“Corporate Transparency Act”) in the next three weeks. As we previously reported on February 18, 2025, the U.S. District Court for the Eastern District of Texas stayed its injunction on the CTA’s beneficial ownership information (“BOI”) reporting requirements. The Financial Crimes Enforcement Network (“FinCEN”) responded by posting an alert on its official government website[1] extending the deadline to submit BOI reports to March 21, 2025, for most reporting companies. However, on ... Continue Reading
The Corporate Transparency Act (CTA) is back on. A federal judge in Texas has lifted the preliminary injunction issued in Smith v. U.S. Department of the Treasury, 6:24-cv-00336 (E.D. Tex.), which had previously prevented the government from enforcing beneficial ownership information (“BOI”) requirements, nationwide. On February 19, 2025, the Financial Crimes Enforcement Network (“FinCEN”) issued a notice1 communicating the new reporting deadline of March 21, 2025, as a response to the Smith ruling. As such, FinCEN will soon begin enforcing the reporting ... Continue Reading
Lenders and other creditors often obtain consent judgment liens against an individual guarantor’s residence as additional security during or after commercial foreclosure proceedings against real estate or other assets owned by an affiliated corporate borrower. Is this type of consensual lien against a guarantor’s home at risk if the guarantor later files for protection under Chapter 7 of the U.S. Bankruptcy Code (Bankruptcy Code) and seeks to set aside or avoid the lien because it impairs the guarantor’s homestead exemption? The answer is yes according to most, but not ... Continue Reading