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The New Jersey Law Journallooks at the thorny issues related to bankruptcy. Some of the topics include the indemnification of financial advisers, priority of construction liens per Bankruptcy Code � 546, the perils of commencing an involuntary bankruptcy, the timeliness of Bankruptcy Code � 362(h) damage claims, and the pressure of labor unions during an impending dissolution.
Debtor Indemnification of a Financial Adviser for Its Negligence Is Reasonable It is increasingly common for financial advisors in bankruptcy proceedings to require indemnification by the estate in their engagement agreements. But such arrangements collide with the interests of creditors and the policy of the Office of the United States Trustee. Bankruptcy Code � 546 and the Construction Lien Law The courts have not resolved the issue of whether the post-petition filing of a contruction lien against a debtor-project of the owner’s property enables the lien to fall within 11 U.S.C � 546(b). Look Before You Leap Into an Involuntary Bankruptcy Case Before allowing a creditor-client to leap at the chance to commence an involuntary bankruptcy, beware the perils. Section 362(h): Use It or Lose It? A review of Bankruptcy Code � 362(h), providing for the right to seek damages arising from a willfull violation of the automatic stay, reveals no time limitation for asserting a claim, but arguments on the timeliness of a � 362(h) claim can be raised. Whether Chapter 13 Debtors Have Standing to Bring Avoidance Actions Remains Unclear Critics of the 3rd U.S. Circuit Court of Appeals Cybergenicsdecision worry it will result in significant assets being lost to creditors because Chapter 11 debtors frequently lack resources or motivation to pursue avoidance actions. Union Labor Under Pressure When Companies File for Protection The recent bankruptcy filings by US Airways and UAL Corporation underscore the extent to which labor issues drive the decision to file for bankruptcy and which issues will require attention during the early days of the case.

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