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Using Article 3-A to Protect Payment Rights in a Construction Bankruptcy

Elizabeth Aboulafia of Cullen and Dykman writes: When general contractors who perform work on construction projects subject to the New York Lien Law file for bankruptcy protection, subcontractors and suppliers that take advantage of the provisions of Article 3-A of the New York Lien Law can maximize recoveries on their claims against the debtor/contractor and utilize the tools available through the bankruptcy process to obtain greater negotiating leverage and oversight over the debtor/contractor’s operations.

Limitations on Adjudicating Disputes Involving Medicare Provider Agreements

Leslie A. Berkoff and Krista L. Kulp of Moritt Hock & Hamroff write: The power of bankruptcy courts to adjudicate Medicare provider agreements has been addressed by several circuit courts in recent years. Given the distressed nature of the health care industry and the continued bankruptcy filings by health care providers, this issue has become more prominent. However, several circuit courts determined that bankruptcy courts lack jurisdiction to adjudicate these issues; and, recently, the First Circuit took an unusual approach.

Fee Defense Litigation: Clarifying the Reach of ‘Asarco’

Seth H. Lieberman, Patrick Sibley and Matthew W. Silverman of Pryor Cashman write: While the bankruptcy bar’s reaction to ‘Asarco’ was short of enthusiastic, most have since embraced the subsequent jurisprudence narrowly construing ‘Asarco’ and limiting its holding to the compensation of bankruptcy estate professionals.

A Preference Pendulum: Extraterritorial Application of Avoidance Powers in the SDNY

Christopher K. Kiplok and Dustin P. Smith of Hughes Hubbard & Reed write: A recent decision by the bankruptcy court for the Southern District of New York in ‘Spizz v. Goldfarb Seligman &. Co. (In re Ampal-American)’, has moved the pendulum away from extraterritoriality back toward a nearer reach of avoidance powers.

A Golden Share and the Conflict Between Freedom of Contract and Federal Policy

Jay M. Goffman and Christine A. Okike of Skadden, Arps, Slate, Meagher & Flom write: A “golden share” gives a lender a say in any subsequent decision by a borrower to seek bankruptcy protection. Lenders have long considered the “golden share” to be an effective mechanism for safeguarding their investments. Recent rulings, however, have cast doubt on the effectiveness of the “golden share” structure.