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Navigating Chapter 9 of the Bankruptcy Code

Title:
Navigating Chapter 9 of the Bankruptcy Code
Agency Publisher: 
Format:
Paperback
USA Price: 
Stock:
In stock
GPO Stock Number:
028-002-00065-3
ISBN:
9780160942112
Table of Contents

Preface, vii I. Introduction, 1

A. Goals for this Manual, 1

B. Some Chapter 9 Basics, 1

C. Structure of the Manual, 2

II. History of Chapter 9, 4

III. Overview of the Chapter 9 Process, 7

A. The Role of the Bankruptcy Code in Chapter 9 Cases, 8

B. The Role of the Chapter 9 Debtor, 12

C. The Role of the Judge, 12

D. The Role of the State, 12

E. Other Major Stakeholders, 13

F. Key Differences Between Chapter 9 and Chapter 11

Cases, 14

1. Political Aspects of the Case, 14

2. Municipal Accounting, 15

3. Municipal Bonds, 16

4. Restricted Funds and Payment of Expenses, 19

5. Commencement of the Case, 20

6. Oversight of the Case, 20

7. Creditors’ Committees, 21

8. No Trustee, Examiner, or Receiver, 21

9. No Liquidation or Conversion, 21

10. Pension and Labor Issues, 21

11. Plan Process, 23

IV. General Administrative Matters, 23

A. Appointment of the Bankruptcy Judge, 23

B. Potential Resource Issues, 24

1. Dedicated Staff, 24

2. Courtroom Space and Access to the Proceedings, 25

3. Website Issues, 26

4. Teleconferencing or Videoconferencing for Hearings, 26

5. Media Communications, 27

6. Coordination with the District Court, 28

7. Security Issues, 29

iv Navigating Chapter 9 of the Bankruptcy Code

8. Claims Agent, 29

9. Noticing Agent, 30

C. Required Notices in Chapter 9 Cases, 30

D. Electronic Filing and Docket Issues, 31

V. The Beginning of the Case, 33

A. Commencement of the Case, 33

B. Order for Relief or Dismissal of the Petition (Including for Lack of Good Faith), 33

C. Eligibility Issues, 34

1. Meet the Definition of a Municipality (§ 109(c)(1)), 35

2. Be Specifically Authorized (§ 109(c)(2)), 35

3. Be Insolvent (§ 109(c)(3)), 37

4. Desire to Effect a Plan (§ 109(c)(4)), 38

5. Demonstrate Progress (§ 109(c)(5)), 38

D. Objections to the Petition, 39

E. Standing Issues, 40

F. Other Issues in the Beginning of the Case, 41

1. Understanding Events Leading up to the Filing, 41

2. Understanding the Debtor’s Objectives for the Case, 42

3. Payment of Prepetition Claims, 43

4. Payment of Postpetition Claims and Administrative Expenses, 43

5. Identifying Key Stakeholders and Potential Conflicts of Interest, 43

6. “First-Day” Orders, 44

G. Retention and Payment of Professionals, 45

H. Potential Tools for Managing the Case, 46

1. Case-Management Orders, 47

2. Scheduling Orders and Status Conferences, 47

3. Discovery Issues and Pretrial Orders, 47

4. Mediation, 48 VI. The Administration of the Case, 50

A. The Automatic Stay, 50

B. The Lack of an Estate, 51

C. The Continued Operation of the Debtor, 51

1. The Debtor as Limited-Purpose Trustee, 51

2. Obtaining Postpetition Credit, 52

iv

Contents

3. Postpetition Effect of a Security Interest; Special Issues with Special Revenue Bonds and Statutory Liens, 52

4. Limitation on Recourse; Special Issues with Special Revenue Bonds, 53

5. Sales of Assets, 53

6. Executory Contracts and Unexpired Leases, 54

7. Collective Bargaining Agreements and Retiree Benefits, 54

8. Pension-Specific Issues, 56

9. Settlements, 57

D. The Chapter 5 Avoiding Powers, 57

E. The Claims Process, 58

1. List of Creditors, 58

2. Creditors Affected by Adjustment of Assessments, 58

3. Proofs of Claim, 59

4. Claims Bar Date, 59

5. Notice and Discharge, 59

VII. The End of the Case: Plan Confirmation, Postconfirmation, and Dismissal Issues, 60

A. The Plan Proponent, 60

B. The Disclosure Statement, 61

C. Objections to Confirmation, 61

D. The Confirmation Process, 62

1. Classification of Claims, 63

2. Good Faith, 64

3. Not Prohibited by State Law, 65

4. Regulatory or Electoral Approval, 65

5. Best Interests and Feasibility Requirements, 65

6. Cramdown, 67

7. Use of Court-Appointed Experts, 68

E. Implementation and Postconfirmation Issues, 69

1. Scope of Discharge, 69

2. Continuing Jurisdiction of Court and Closing of Case, 70

3. Postconfirmation Modification of the Plan, 70

4. Revocation of Confirmation Order, 71

5. Application of Equitable Mootness in Appeals, 71

F. Dismissal of the Case, 72

Navigating Chapter 9 of the Bankruptcy Code

vi

VIII. Issues Common in Smaller and Special Purpose Entity Cases, 73

A. Resources and Scaling Case to Size of Debtor, 73

B. Importance of Status Conferences and Timelines, 73

C. Issues Specific to State-Owned or State-Controlled Entities or Districts, 74

1. Eligibility Issues, 74

2. Authorization, 75

3. Financing Issues, 75

D. Issues Specific to Hospital Bankruptcies, 75

1. Treatment of Patient Information, 76

2. Appointment of a Patient Care Ombudsman, 76

3. Sales of Hospitals in Chapter 9, 77

IX. Issues Common in Larger Cases, 77

A. Logistical Issues, 78

B. Coordination Issues, 80

C. Intercreditor Issues, 80

X. Key Takeaways, 80

Appendix A: Comparison of Chapter 9 and Chapter 11 of the U.S. Bankruptcy Code, 83

Appendix B: Chapter 9 Cases Filed During Fiscal Years 2008–2016, 91

Description

It's not an easy decision for a municipality to file bankruptcy. The ramifications for the municipality itself, and for its citizens, are vast. When such a decision to file bankruptcy is made, that filing puts a weighty responsibility on the bankruptcy court.

During the past few years, the Judicial Conference Committee on the Administration of the Bankruptcy System has watched with interest the Chapter 9 cases around the country, as well as the developments in Puerto Rico. We found it to be a complicated arena, with many competing concerns and areas with incomplete legislative and rule guidance—all against considerations stemming from the reservation of powers to the states under the Tenth Amendment. In June 2016, the Bankruptcy Administration Committee determined that additional resources could help courts handling Chapter 9 cases, and so suggested engaging the Federal Judicial Center in the development of a manual.

Audience

Individuals facing the possibility of bankruptcy, judicial members of the courts presidng over bankruptcy cases, litigtors and other legal professionals engaged in bankruptcy proceedings.

Product Details

Availability Details:
In Stock
USA Price:
$14.00
International Price:
$19.60
Publisher:
Federal Judicial Center
Year/Pages:
2017: 105 p.
Key Phrases:
  • Bankruptcy
Weight:
0.4375
Quantity Price:
Discount
Cover:
Paper
Unit of Issue (US):
1
Unit of Issue (Non-US):
1
Item available Date:
10/31/2017
Last Status Update:
11/24/2017
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