This article was authored by Phillip G. Young, Jr., a partner with the law firm of Thompson Burton PLLC, and Leena Shetty, a third year law school student at Vanderbilt School of Law. Questions regarding this article or its contents may be directed to Mr. Young at 615-465-6008 or [email protected] The COVID-19 outbreak and its consequences have pressured state and federal governments to impose restrictions on businesses across industries, resulting in closings and disruptions to the supply chain and product sales. Many businesses have insurance policies covering business interruption, but will those policies cover losses associated with COVID-19? Generally, business interruption policies cover lost revenue, fixed costs, expenses associated with operating from a temporary location if appropriate, and other reasonable expenses that enable the business to continue to operate. The coverage extends until the end of the business interruption period. Business interruption clauses often require “physical loss or damage” resulting […]Continue Reading
Bankruptcy and Creditors' Rights
Thompson Burton's Bankruptcy and Creditors' Rights practice is full service, assisting clients in all manners of insolvency proceedings. Our attorneys specialize in bankruptcy, receiverships, commercial loan workouts, creditors' rights, Ponzi schemes, and complex commercial litigation, with the ability to represent parties on all sides of a dispute including creditors, debtors, receivers, and trustees.
As part of its creditors' rights practice, Thompson Burton routinely represents financial institutions, corporations, governmental entities, and individuals in complex workouts, bankruptcies, receiverships, state and federal court litigation and judgment enforcement. Our attorneys are recognized for their ingenuity, experience, and practicality in representing the interests of commercial creditors.
Thompson Burton's attorneys also have extensive experience in representing corporate debtors in Chapter 11 bankruptcies, chapter 7 bankruptcies, receiverships and outside of court debt restructuring. Thompson Burton has the tools to represent every kind of debtor, from a small, single member LLC to a large, publicly traded corporation to successfully and efficiently achieve their restructuring goals.
Some of Thompson Burton's attorneys are also frequently retained to represent court-appointed bankruptcy trustees and receivers in evaluating and pursuing litigation assets in state court, federal court, and bankruptcy court. Thompson Burton is recognized as one of the leading insolvency litigation law firms in the Mid-South region due to the breadth of its experience and its success in such litigation.
Thompson Burton's multi-faceted approach to its insolvency practice enables its attorneys to examine complex legal problems from all angles, and to craft legal strategies and solutions that are most effective and efficient for its clients.
Special purpose entities (“SPE” or “SPE’s”) are frequently utilized in financial transactions for any number of reasons including: tax issues, protection of assets, liability insulation (including environmental concerns), and for the benefit of creditors involved in the transaction. SPE’s involve the creation of a corporate entity usually taking the form of a limited liability company, corporation, or limited partnership designed solely to serve a special need between the parties in a transaction. They provide a layer of insulation between one or more of the parties owning the SPE and the outside world. One subset of SPE’s is the “bankruptcy remote entity” (“BRE” or “BRE’s”). A BRE is most often created a the behest of a creditor/lender, and is used to protect that creditor’s collateral from other creditors or in an attempt to prevent a voluntary filing for bankruptcy protection. Typically, the creditor or someone friendly to the creditor is appointed as a […]Continue Reading
In Greek mythology, Sisyphus was punished by the gods as a result of his chronic deceitfulness. Sisyphus was required to push a humongous boulder up a slope every day only to have it roll back down once it reached the top and then repeat the process. The parallels between this myth and the mortgage service industry cannot be understated. As a result of the “mortgage meltdown” and “robo-signing” scandal, the Consumer Financial Protection Bureau (the “CFPB”) was created to give consumers an oversight agency to protect them from rogue mortgage servicers. The CFPB, has previously enacted several rules and regulations designed to end “deceitful” and damaging practices in the mortgage industry. Recently, the CFPB has proposed a new rule designed to provide greater protections to consumers in the default and foreclosure process. The newly proposed rule, which has just been released for review and comment, would alter the Real Estate […]Continue Reading
Let’s face it. Swaps are complicated. Few outside the financial industry fully understand them but they are an integral part of the financial and investment industry. The basic definition of a swap is “the exchange of one set of cash flows for another.” It is a future commodity, in which one party seeks to derive a benefit from an existing interest rate in a loan deal based upon what the interest rate may be on a future date. If the party is correct, it is deemed to be “in the money” and obtains a cash benefit. If incorrect, then the party will not, and be deemed to be “out of the money.” Swaps are traded in the marketplace, though not on any well-known exchange, and oversight of the swaps marketplace falls to the Commodity Futures Trading Commission (“CFTC”). When the financial markets melted down, Congress passed several laws in an […]Continue Reading
It is common practice for lenders to require personal guaranties as part of the credit and collateral package when making a loan. Oftentimes, more than one guarantor is needed to “shore up” the creditworthiness of the credit applicant. Usually, multiple guarantors are not an issue except when one of the guarantors is a spouse of the applicant. More than ever, lenders need to exercise caution when seeking the guaranty from the spouse of an applicant. In 1974, Congress enacted the Equal Credit Opportunity Act (“ECOA”) in an effort to “eradicate credit discrimination waged against women, especially married women whom creditors traditionally refused to consider for individual credit.” Mays v. Buckeye Rural Elec. Coop., 277 F.3d 873, 876 (6th Cir. 2002). The ECOA’s implementing regulation is known as “Regulation B,” and it aims “‘to promote the availability of credit to all creditworthy applicants without regard to … sex [or] marital status [and other […]Continue Reading