Palestine budgets – The Right Road To Peace http://therightroadtopeace.com/ Fri, 18 Mar 2022 07:07:29 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://therightroadtopeace.com/wp-content/uploads/2021/10/icon-2.png Palestine budgets – The Right Road To Peace http://therightroadtopeace.com/ 32 32 Aeromexico emerges from bankruptcy with $5 billion investment plan and fleet changes https://therightroadtopeace.com/aeromexico-emerges-from-bankruptcy-with-5-billion-investment-plan-and-fleet-changes/ Thu, 17 Mar 2022 23:34:00 +0000 https://therightroadtopeace.com/aeromexico-emerges-from-bankruptcy-with-5-billion-investment-plan-and-fleet-changes/ MEXICO CITY, March 17 (Reuters) – Mexican airline Grupo Aeromexico (AEROMEX.MX) said on Thursday it had emerged from bankruptcy protection, adding that it now plans to spend $5 billion over the next next five years for its fleet modernization and other upgrades. The airline, which filed for bankruptcy after the pandemic sent demand plummeting, detailed […]]]>



MEXICO CITY, March 17 (Reuters) – Mexican airline Grupo Aeromexico (AEROMEX.MX) said on Thursday it had emerged from bankruptcy protection, adding that it now plans to spend $5 billion over the next next five years for its fleet modernization and other upgrades.

The airline, which filed for bankruptcy after the pandemic sent demand plummeting, detailed plans to receive 22 more aircraft in 2022, bringing its total aircraft fleet to 147 by the end of the year. Last year, the company signed a deal to buy 28 planes from Boeing Co (BA.N), which it said would result in savings of $2 billion. Read more

The previously announced fleet upgrade could help reduce the company’s fuel costs since the Boeing 737 MAX costs 20% less than its predecessors to operate, said Rene Armas Maes, vice president of commercial and aviation consultant at Jet Link International LLC.

Beyond modernizing its fleet, Aeromexico needs to implement technology that further reduces unit costs, to better compete with low-cost local carriers Volaris (VOLARA.MX) and Viva Aerobus, and peers operating international connections, he said.

In a press release, the carrier said it would also restart some international routes it had halted during the pandemic, including to London, and open new ones.

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Reporting by Noe Torres, Laura Gottesdiener and Valentine Hilaire; Written by Kylie Madry; Editing by Anthony Esposito, Tim Ahmann and Bernard Orr

Our standards: The Thomson Reuters Trust Principles.



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TM Lewin plummets in administration as dress shirt sales dry up – Sourcing Journal https://therightroadtopeace.com/tm-lewin-plummets-in-administration-as-dress-shirt-sales-dry-up-sourcing-journal/ Thu, 17 Mar 2022 21:15:39 +0000 https://therightroadtopeace.com/tm-lewin-plummets-in-administration-as-dress-shirt-sales-dry-up-sourcing-journal/ TM Lewin plummets in administration as dress shirt sales dry up – Sourcing Journal Facebook pinterest Search icon SourcingJournal_horiz Glass Twitter Shape camera graph-trend logo Shape icon / user You will be redirected to your article in seconds March 17, 2022 5:15 PM ET Britain’s second largest menswear brand bankruptcy in two years does not […]]]>








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Britain’s second largest menswear brand bankruptcy in two years does not bode well for sellers of office clothes. Workers in the UK and elsewhere are returning to their offices, but TM Lewin’s second slump in administration suggests that male white-collar employees dress differently for work and that formal shirts are not part of their Game plan….

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Clintwood Man pleads guilty to bankruptcy fraud | USAO-WDVA https://therightroadtopeace.com/clintwood-man-pleads-guilty-to-bankruptcy-fraud-usao-wdva/ Thu, 17 Mar 2022 19:18:09 +0000 https://therightroadtopeace.com/clintwood-man-pleads-guilty-to-bankruptcy-fraud-usao-wdva/ ABINGDON, Va. – A Clintwood, Va. man who concealed his stake in a waste management company and did not report his employment and income from that company when filing for Chapter 7 bankruptcy, pleaded guilty yesterday to one count of bankruptcy fraud to federal seek. According to court documents, in June 2020, 48-year-old David Bryan […]]]>



ABINGDON, Va. – A Clintwood, Va. man who concealed his stake in a waste management company and did not report his employment and income from that company when filing for Chapter 7 bankruptcy, pleaded guilty yesterday to one count of bankruptcy fraud to federal seek.

According to court documents, in June 2020, 48-year-old David Bryan “Pokey” Stanley filed for Chapter 7 bankruptcy with the United States Bankruptcy Court for the Western District of Virginia. At the time of his deposition, Stanley falsely testified under oath that he was unemployed and had no income.

However, at the time of his bankruptcy filing, Stanley knew he owned a stake in a waste container company he started in 2016 called Interstate Waste Management, LLC, and was receiving income.

Stanley is due on June 7, 2022 and faces a maximum sentence of five years in prison. A federal district court judge will determine any sentence after considering US sentencing guidelines and other statutory factors.

The Office of the United States Trustee and the Federal Bureau of Investigation are investigating the case.

Assistant United States Attorney Lena L. Busscher is prosecuting the case.



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State senator’s ex-husband sued over bankruptcy debt https://therightroadtopeace.com/state-senators-ex-husband-sued-over-bankruptcy-debt/ Thu, 17 Mar 2022 19:14:12 +0000 https://therightroadtopeace.com/state-senators-ex-husband-sued-over-bankruptcy-debt/ A Tri-City executive is being sued in U.S. bankruptcy court by a creditor seeking more than $1 million for an unpaid loan balance, interest, and legal fees. The case against Fraser S. Hawley, a developer and business executive who was married to state Sen. Sharon Brown, R-Kennewick, is scheduled to go to trial May 9 […]]]>



A Tri-City executive is being sued in U.S. bankruptcy court by a creditor seeking more than $1 million for an unpaid loan balance, interest, and legal fees.

The case against Fraser S. Hawley, a developer and business executive who was married to state Sen. Sharon Brown, R-Kennewick, is scheduled to go to trial May 9 in Yakima before Judge Whitman Holt.

Hawley is being sued by MS Properties LLC and owner Michael Shemali, who are asking the court to determine whether Hawley’s debt could be discharged under the US Bankruptcy Code.

Hawley filed for liquidation of his Chapter 7 assets in 2020, after he and Brown, who lived in Benton County, were granted a divorce in Walla Walla Superior Court. The bankruptcy was discharged in March 2021.

Shemali, along with Columbia Bank and JP Morgan Chase, were its main unsecured creditors.

According to the complaint, Hawley and his partner Thomas Arnold borrowed $500,000 from MS Properties in 2016. Later that year, Hawley told MS Properties he needed additional money and, along with Arnold and Sorvevi Investment , obtained an additional loan of $250,000.

The lawsuit does not identify the purpose of the loans. Hawley is the only defendant.

The plaintiff began filing claims in July 2017. The outstanding balance, including interest and legal fees, was $1.09 million as of January 2021, when the case went to court. Federal Court.

The lawsuit centers on allegations that Hawley hid assets that could have repaid debt by divorcing and transferring assets to his wife, which he disputes in response to the original complaint.

According to the lawsuit, Hawley was married to Brown when the notes were signed, and the couple had significant and valuable assets.

The lawsuit says the couple entered into a “mock divorce” in which Hawley transferred assets to Brown and out of bankruptcy. The initial divorce judgment was pronounced on March 30, 2018.

Hawley’s response notes that the couple divorced in Walla Walla County in part because Brown is prominent in the Tri-Cities due to her position as a state senator representing the 8th Legislative District. Prior to that, she served on Kennewick City Council. She is a lay lawyer and a member of the Washington State Bar, according to the bar directory.

The lawsuit alleges that Hawley deliberately used the divorce to place assets beyond the reach of her creditors.

Hawley countered that no assets were transferred. According to Hawley, the couple clarified their separate and joint interests in a 2005 postnuptial agreement.

The lawsuit alleges Hawley and Brown continued to live together and shared assets, including a home and funds.

Hawley replied that the couple had tried to reconcile on several occasions and had lived together at one point. The reconciliation failed and he lives with his son.

In response to the lawsuit, Hawley argued that there was no attempt at deception and is asking that the case be dismissed and reimbursed for legal costs.

MS Properties requested a jury trial. He is represented by Lukins & Annis PC, a Spokane law firm. Hawley is represented by Davidson Backman Medeiros PLLC, also of Spokane.



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What is bankruptcy and how does it work? • Legal Scoops https://therightroadtopeace.com/what-is-bankruptcy-and-how-does-it-work-legal-scoops/ Thu, 17 Mar 2022 19:11:36 +0000 https://therightroadtopeace.com/what-is-bankruptcy-and-how-does-it-work-legal-scoops/ There is no way to approach the topic of personal bankruptcy without first addressing the basics. If you are considering bankruptcy as a solution to your financial problems, it can be helpful to understand what it involves and how it works. Bankruptcy is the process of paying off your debts under Chapter 7 or Chapter […]]]>



There is no way to approach the topic of personal bankruptcy without first addressing the basics. If you are considering bankruptcy as a solution to your financial problems, it can be helpful to understand what it involves and how it works. Bankruptcy is the process of paying off your debts under Chapter 7 or Chapter 13 of the US Bankruptcy Code, but not all debts qualify for relief under these chapters. The following sections explain the basics of bankruptcy to know what it is and how it works.

Most people cringe at the mere mention of bankruptcy, and it can be a scary concept. However, debt relief under Chapter 7 or Chapter 13 of the US Bankruptcy Code is one way to get protection from paying your debts in full. This is an option of last resort, but it can help get you back on track.

Chapter 7 Bankruptcy

If you deposit for Chapter 7 Bankruptcy protection, you surrender most of your assets to creditors. However, you must also prove that you cannot pay your bills and that your creditors are unlikely to be reimbursed in full. This can be difficult to prove, so most people seeking bankruptcy protection use Chapter 13 bankruptcy instead.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is often preferable to Chapter 7 because you don’t have to give your assets to creditors, but you do have to pay at least some of your bills. Under Chapter 13 bankruptcy, the court will create a plan to pay off your debts over the next three to five years. After that, the court will determine how much you can afford to pay and whether creditors should receive all or none of what you owe.

who declares bankruptcy

So you got a notice from the bank that your house was foreclosed, and now you’re wondering who filed for bankruptcy. There’s a lot of confusion around this question, but it’s not as confusing as it seems. If a bank repossesses your home because you haven’t repaid your mortgage payments, this action is called a “power of sale” foreclosure. A foreclosure with power of sale is different from a court foreclosure because, in a court foreclosure, the bank must go through the legal process to foreclose on your home. With power of sale, the bank can follow its pre-established guidelines and seize immediately.

However, with a power of sale, the bank must still file a notice of default with the court. Before reacting to this advice, you should know that some owners go through a voluntary bankruptcy procedure. So before you jump to the conclusion that you can’t expect free legal representation if your home is seized by a power of foreclosure, remember that there are other ways out of this situation. If a person declares bankruptcy, they officially declare bankruptcy. If you were to go to court and declare bankruptcy yourself, you would be considered the “petitioner” in the proceedings. The applicant cannot file for bankruptcy on their behalf, but they can always choose to authorize someone else to do so on their behalf. In these procedures, a person who declares bankruptcy is called a “debtor”.

When should I declare bankruptcy?

There are many professions that cater to people living in America. One of them is the field of law, where lawyers fight for their clients, usually in criminal and civil cases. In these situations, lawyers are remunerated. But some people cannot afford a lawyer.

So what are they doing? In these cases, they declare bankruptcy to fulfill (pay their debts) these obligations. Bankruptcy can be a lifesaver for some people, but it’s not something anyone should take lightly. Although it’s rarely the best choice for people in financial difficulty (and there are times when bankruptcy may not be appropriate even if debts don’t need to be discharged), everyone should know how to file for bankruptcy. Here’s why:

  • It’s usually not the best option for people with big debts, but it’s always good to know what to do. Spotting financial problems early on can save you thousands of dollars. Unfortunately, many people don’t know what to do when they run into a problem and file for bankruptcy. The first step is to talk to a knowledgeable advisor like an experienced attorney, CPA, or escrow agent.
  • It is never too late for a bankruptcy discharge. Bankruptcy may not be the best idea for people in debt, but it’s a good option, especially if you’re having trouble paying off your loans or credit card bills.
  • Not all bankruptcy petitions are accepted for filing and only some of the debts are discharged. It is important to understand that not all debts can be discharged through bankruptcy. The debtor must prove to the court that he has a good reason for filing the petition, and if he cannot pay his bills at that time, these obligations may not be discharged by the court.

Consequences of bankruptcy

Remember that old adage, “you can’t get something for nothing?” The same applies in the event of bankruptcy. Once you have declared bankruptcy and it has been discharged, your creditors will still be able to sue you for the unpaid debts they claim are owed. However, if a creditor comes after you before the discharge has taken place, there is a risk that this will trigger a reaffirmation agreement. This means that the creditor takes charge of collecting the debts on the account and only asks for payment of these debts without harassing you or contacting you again about it.

There are a few things you can do to avoid this. First, don’t act like you have a lot of money in front of the creditor; they may be able to use your statement against you later. It is best to act as if you have financial problems. Second, don’t do anything that could be construed as reaffirming a debt. This includes allowing credit card companies to increase your credit limit or to continue using a credit card after you go bankrupt.

Jacob Maslow

Legal Scoops editor Jacob Maslow founded several online journals, including Daily Forex Report and Conservative Free Press.



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Communicating Distress in the Digital Age – Insolvency/Bankruptcy/Restructuring https://therightroadtopeace.com/communicating-distress-in-the-digital-age-insolvency-bankruptcy-restructuring/ Thu, 17 Mar 2022 16:54:08 +0000 https://therightroadtopeace.com/communicating-distress-in-the-digital-age-insolvency-bankruptcy-restructuring/ United States: Communicating Distress in the Digital Age March 17, 2022 Sheppard Mullin Richter & Hampton To print this article, all you need to do is be registered or log in to Mondaq.com. During times of business uncertainty, the company’s message to customers, suppliers and employees can either inspire confidence or foster anxiety. This is […]]]>



United States: Communicating Distress in the Digital Age

To print this article, all you need to do is be registered or log in to Mondaq.com.

During times of business uncertainty, the company’s message to customers, suppliers and employees can either inspire confidence or foster anxiety. This is more true than ever in the age of digital and social media. In a Chapter 11 scenario, then, engaging with, rather than dodging, press calls may be the preferred approach. This provides the opportunity to craft the message as well as address leaked misinformation.

For more on this topic, listen to Restructure THIS! Podcast Episode 6 hosted by Sheppard Mullin’s partner, Justin Bernbrock, who interviews Sydney Isaac and Dan Scorpio of the communication company Abernathy MacGregor.

About Restructure CE!

Sheppard Mullin’s Restructure This! podcast explores the latest trends and controversies in Chapter 11 bankruptcy, business insolvency, and distressed investing. Join host Justin Bernbrock, a partner in the firm’s Finance and Bankruptcy group, as he and his guests discuss popular, and sometimes less popular, developments in the wild west of the legal world of bankruptcy and high-yield transactions. Subscribe on the show to receive each new episode delivered directly to your podcast player on Apple podcast, Google Podcasts, Spotify, Amazon Music Where embroiderer.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

POPULAR ARTICLES ON: Insolvency/Bankruptcy/Restructuring from the United States

Industry News – January 28, 2022

Arnall Golden Gregoire

AGG’s Restructuring Roundup newsletter is a monthly update on legal issues and news affecting or related to commercial litigation and bankruptcy.



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Puerto Rico officially emerges from bankruptcy after largest public debt restructuring https://therightroadtopeace.com/puerto-rico-officially-emerges-from-bankruptcy-after-largest-public-debt-restructuring/ Thu, 17 Mar 2022 16:44:00 +0000 https://therightroadtopeace.com/puerto-rico-officially-emerges-from-bankruptcy-after-largest-public-debt-restructuring/ SAN JUAN, Puerto Rico — Puerto Rico’s government officially emerged from bankruptcy on Tuesday, completing the largest public debt restructuring in U.S. history after announcing nearly seven years ago that it was unable to repay its debt of more than 70 billion dollars. The exit means the U.S. territory government will resume payments to bondholders […]]]>



SAN JUAN, Puerto Rico — Puerto Rico’s government officially emerged from bankruptcy on Tuesday, completing the largest public debt restructuring in U.S. history after announcing nearly seven years ago that it was unable to repay its debt of more than 70 billion dollars.

The exit means the U.S. territory government will resume payments to bondholders for the first time in several years and settle some $1 billion in claims filed by residents and local businesses.

“This is a significant achievement,” said Natalie Jaresko, executive director of the federal board of control that oversees Puerto Rico’s finances and its debt restructuring process. “Stay bankrupt has been a drag on the economy in many ways.”

The bankruptcy led to widely criticized austerity measures on an island that paid around $1 billion in consultancy and attorney fees and other expenses in the process.

The exit was a priority for the board and Jaresko, who previously announced she would retire on April 1. A replacement has not yet been named. The council is expected to remain in place until Puerto Rico has four consecutive balanced budgets, a feat that has yet to be achieved.

The debt restructuring plan was approved by a federal judge in January. It reduces claims against the Puerto Rico government from $33 billion to just over $7.4 billion, with 7 cents of every taxpayer dollar going to debt service, down from 25 cents previously.

“It’s a transcendental moment,” Governor Pedro Pierluisi said. “The plan isn’t perfect…but it has a lot of good things in it.”

The board clashed several times with Pierluisi and previous administrations, including over a proposal to cut some monthly retirement benefits that was eventually dropped.

The plan also deposits $1.5 billion into public pension systems and creates a retirement reserve trust that will be funded with more than $10 billion in future years.

“For decades, past governments have neglected to put enough money aside,” Jaresko said.

While many celebrated Puerto Rico’s emergence from bankruptcy, Jaresko said it was unlikely the island would be able to access financial markets soon because it has yet to update its audited financial statements.

Puerto Rico has accumulated more than $70 billion in public debt and more than $50 billion in public pension obligations over decades of corruption, mismanagement, and excessive borrowing. The US Congress created the federal council in 2016, a year after the island’s government said it was unable to pay its debt.

In 2017, the government of Puerto Rico filed the largest municipal bankruptcy in US history. Months later, Hurricane Maria hit, flattening the island’s power grid and causing billions of dollars in damage.

The island is still trying to recover from the hurricane as well as a series of powerful earthquakes that hit its southern region from late 2019. The coronavirus pandemic has also been a serious setback.

Bankruptcy proceedings for the Highways and Transportation Authority and the Electric Power Company of Puerto Rico, which owe nearly $9 billion, the largest debt of any government agency, remain unresolved.

In early March, Puerto Rico’s governor announced he was canceling a deal to restructure the electric company’s debt, saying worsening inflation, soaring oil prices and other factors had significantly changed since the negotiation of the agreement with creditors in 2019.

Jarekso said the council expects to resume negotiations, mediation and discussion with everyone who bought bonds issued by the power company soon.

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Delaware Bankruptcy Court Eases Burden of Establishing Administrative Claim – Insolvency/Bankruptcy/Restructuring https://therightroadtopeace.com/delaware-bankruptcy-court-eases-burden-of-establishing-administrative-claim-insolvency-bankruptcy-restructuring/ Thu, 17 Mar 2022 11:37:58 +0000 https://therightroadtopeace.com/delaware-bankruptcy-court-eases-burden-of-establishing-administrative-claim-insolvency-bankruptcy-restructuring/ United States: Delaware Bankruptcy Court Eases Burden of Establishing Administrative Claim To print this article, all you need to do is be registered or log in to Mondaq.com. The case MTE Holdings’ activities included oil and gas drilling, an activity that generates large amounts of toxic wastewater. These by-products must be disposed of in accordance […]]]>



United States: Delaware Bankruptcy Court Eases Burden of Establishing Administrative Claim

To print this article, all you need to do is be registered or log in to Mondaq.com.

The case

MTE Holdings’ activities included oil and gas drilling, an activity that generates large amounts of toxic wastewater. These by-products must be disposed of in accordance with applicable environmental regulations.

Prior to bankruptcy, MTE Holdings had initiated a pipeline project to transport wastewater from its various field wells to a central disposal facility. The capacity of this pipeline exceeded the debtor’s wastewater production and the debtor planned to generate additional revenue by billing other oil and gas exploration and production companies for the disposal of the wastewater. The debtor retained the services of Gray Surface to provide consulting and advisory services on elements of the pipeline project.

Following the bankruptcy filing, the debtor’s pre-petition secured lenders announced that they did not support the proposed sewage disposal expansion and would not allow their cash collateral be used for this purpose. The debtor was, however, willing to proceed with the project and assured Gray Surface that its invoices would be paid through a non-debtor affiliate controlled by the debtor’s principal. When the Affiliate failed to pay as promised, Gray Surface filed a claim seeking compensation and immediate payment of an administrative expense for the unpaid invoices.

The context

Claims for administrative costs, which enjoy priority of payment, are allowed for “costs and expenses actual and necessary to preserve the estate” (11 USC § 503(b)(1)(A)). In the Third Circuit, a successful administrative plaintiff must demonstrate that “(1) there was a post-petition transaction between the plaintiff and the estate and (2) those expenses provided a benefit to the estate.” (In re Energy Future Holdings Corp., 990 F.3d 728, 741 (3d Cir. 2021)).

Authorized administrative expense claims must be paid in full before payment is made to lower classifications such as general unsecured claims. A Chapter 11 debtor cannot emerge from bankruptcy without paying authorized administrative debt holders in full as of the effective date of the plan or obtaining their consent to different treatment.

In the MTE Holdings case, there was no dispute regarding the amounts of the invoices or whether Gray Surface performed the services related to its administrative claim. Rather, the main dispute was whether the “benefit to the estate” of the services provided under the sewage disposal project was too speculative to warrant administrative expense status.

In opposing Gray Surface’s motion for an administrative claim, the debtor argued that in order to “bear its heavy burden” in order to qualify for treatment of administrative expenses, Gray Surface had to prove that the bankruptcy estate had obtained “demonstrable increases in profits, revenue or competitive position” as a result. of the services provided.

decision

The bankruptcy court rejected this argument, concluding that the applicable case law does not require an uninitiated third party who provides goods or services to a debtor in possession on ordinary commercial terms to prove that the receipt of those goods or services led directly to increased profits or valuation. The court found that the seller’s belief that “the project would generate additional revenue or increase the value of his business” was sufficient to establish a claim

The impact

This opinion provides a strong argument for sellers dealing, after the petition, with debtors on standard commercial terms – notably, that the “benefit to the estate” requirement establishing an administrative priority claim is satisfied simply by demonstrating that the debtor reasonably believed that the goods or services provided would increase revenue or increase the value of the business.

Click here to read the in-depth article by Alexander Barnes of member firm Ally Law Obermayer.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

POPULAR ARTICLES ON: Insolvency/Bankruptcy/Restructuring from the United States

Industry News – January 28, 2022

Arnall Golden Gregoire

AGG’s Restructuring Roundup newsletter is a monthly update on legal issues and news affecting or related to commercial litigation and bankruptcy.



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SBA may deny PPP loan due to bankruptcy, appeals court rules https://therightroadtopeace.com/sba-may-deny-ppp-loan-due-to-bankruptcy-appeals-court-rules/ Wed, 16 Mar 2022 20:26:00 +0000 https://therightroadtopeace.com/sba-may-deny-ppp-loan-due-to-bankruptcy-appeals-court-rules/ REUTERS/Dado Ruvic/Illustration Join now for FREE unlimited access to Reuters.com Register Summary Law firms Related documents Bankrupt Vermont hospital not eligible for pandemic aid, court rules Grants, not loans, protected by bankruptcy law (Reuters) – The Small Business Administration was within its rights to deny pandemic aid to a nonprofit hospital on the basis that […]]]>



REUTERS/Dado Ruvic/Illustration

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  • Bankrupt Vermont hospital not eligible for pandemic aid, court rules
  • Grants, not loans, protected by bankruptcy law

(Reuters) – The Small Business Administration was within its rights to deny pandemic aid to a nonprofit hospital on the basis that it was bankrupt, a federal appeals court ruled on Wednesday.

The United States 2nd Circuit Court of Appeals said in a decision that while bankruptcy law prohibits government entities from denying a debtor a permit, license, or “other similar grant” because of their state of bankruptcy, the SBA’s Paycheck Protection Program, which provided funding for small businesses affected by the COVID-19 pandemic, did not qualify for such a grant because the funding it offered was in the form of a loan.

Although many courts have considered whether PPP financing qualifies as a grant, the 2nd Circuit is the first appellate court to rule on the issue.

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The three-judge panel reversed a June 2020 ruling by U.S. Bankruptcy Judge Colleen Brown in Vermont that the SBA could not deny Springfield Hospital Inc.’s PPP funding application.

Lawyers for the hospital and an SBA spokesperson did not immediately respond to requests for comment.

Springfield Hospital and Springfield Medical Care Systems Inc, a Vermont-based critical access hospital and medical service provider, filed for Chapter 11 protection in June 2019, but continued operations during bankruptcy. . He applied for $3.6 million in PPP funds while bankrupt.

The government loan program was enacted in March 2020 to provide small businesses with financing to help pay payroll and operating expenses during the pandemic. The SBA has disbursed nearly $800 billion in PPP loans.

Springfield sued the SBA in April 2020 after it denied the hospital’s request for funding. In response, the SBA argued that the funds it distributed through the PPP were loans, not grants protected by bankruptcy law.

The hospital was cleared from Chapter 11 in December 2020.

In Wednesday’s decision, written by U.S. Circuit Judge Joseph Bianco, the panel concluded that just because the SBA forgives many of the loans does not automatically qualify them as grants. Rather, businesses must meet certain financial criteria to get loan forgiveness, he said.

“In short, the mere existence of a forgiveness option does not turn the PPP into a ‘free money’ grant, as the bankruptcy court called it,” Bianco wrote.

The case is Springfield Hospital Inc v. Guzman, US Circuit Court of Appeals, No. 20-3902.

For Springfield: Andrew Helman of Dentons Bingham Greenebaum; and Adam Prescott and D. Sam Anderson of Bernstein, Shur, Sawyer & Nelson

For the SBA: Acting Assistant Attorney General Brian Boynton; Acting U.S. Attorney for the District of Vermont Jonathan Ophardt; and Joseph Salzman, Mark Stern and Lindsay Powell of the US Department of Justice

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LATAM Airlines bankruptcy judge clears $734 million in financing charges https://therightroadtopeace.com/latam-airlines-bankruptcy-judge-clears-734-million-in-financing-charges/ Wed, 16 Mar 2022 15:29:00 +0000 https://therightroadtopeace.com/latam-airlines-bankruptcy-judge-clears-734-million-in-financing-charges/ A LATAM Airlines plane carrying cargo in Montevideo, Uruguay February 25, 2021. REUTERS/Mariana Greif Join now for FREE unlimited access to Reuters.com Register Summary Law firms Related documents Opponents called the fees unreasonably high The judge finds the fees reasonable given the financing risk LATAM Airlines Group SA on Tuesday won court approval of a […]]]>



A LATAM Airlines plane carrying cargo in Montevideo, Uruguay February 25, 2021. REUTERS/Mariana Greif

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  • Opponents called the fees unreasonably high
  • The judge finds the fees reasonable given the financing risk

LATAM Airlines Group SA on Tuesday won court approval of a creditor settlement that will secure funding for a proposed restructuring despite outcry from junior creditors objecting to hundreds of millions of dollars in fees associated with the transaction.

U.S. Bankruptcy Judge James Garrity in Manhattan approved LATAM’s so-called stand-by agreement with a group of creditors, under which the creditors will guarantee the financing if no one else comes forward to provide it. As part of the deal, the 15 supporting creditors would receive $734 million in fees to ensure $5.4 billion in equity and debt issuances are fully funded. The deal is part of the Chilean airline’s broader restructuring plan that calls for it to raise more than $8 billion to pay creditors and emerge from bankruptcy.

“The opponents have not rebutted the presumption that entering into the support agreements is a proper exercise of debtors’ business judgment,” the judge said in his statement. 85-page decision.

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A representative for LATAM did not immediately comment.

LATAM filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York in May 2020, as global travel came to a halt amid the COVID-19 pandemic.

Two groups of junior creditors opposed the guarantee agreement, including the airline’s official committee of unsecured creditors. The committee argued that the fees the support group, which includes Strategic Value Partners, Sixth Street Partners and Olympus Peak Asset Management, would collect are “unreasonably high” and that the airline should have considered lower-cost options. Additionally, the committee argued that the deal unfairly favored shareholders, including Delta Air Lines Inc, over junior creditors.

The committee, which pushed LATAM to consider alternative funding sources, also challenged the discounts the support group would receive to buy new debt and company stock.

A lawyer for the committee did not immediately respond to a request for comment.

In Tuesday’s decision, Garrity rejected the argument that the fee had not been tested in the market, saying he was satisfied because it was the result of a thorough mediation process. He also said the fee is reasonable given the risk that supporting creditors take in pledging to guarantee the financing of such large rights offerings.

Garrity also approved an agreement with existing shareholders, including Delta, to support $400 million of a common stock offering and up to $1.3 billion of a debt offering. This agreement does not include fees but provides legal protections and expense reimbursements for shareholders.

The case is In re LATAM Airlines Group SA, US Bankruptcy Court, Southern District of New York, No. 20-11254.

For LATAM: Richard Cooper, Lisa Schweitzer, Luke Barefoot and Thomas Kessler of Cleary Gottlieb Steen & Hamilton

For the committee: Allan Brilliant, Michael Doluisio, Craig Druehl and David Herman of Dechert

For supporting creditors: Kenneth Eckstein, Douglas Manna, Rachel Ringer and Douglas Buckley of Kramer Levin Naftalis & Frankel

Read more:

LATAM Airlines files restructuring plan to emerge from bankruptcy

LATAM Airlines receives several financing offers to emerge from bankruptcy filing

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