New Bankruptcy Code

1. INTRODUCTION
2. THE BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2005
3. EFFECTIVE DATE OF BAPCPA
4. THE AUTOMATIC STAY
1. Overview of the Automatic Stay
2. Automatic Stay Not Applicable to Small Business Serial Filers
3. Automatic Stay Provides for "In rem" Relief
4. Automatic Stay Provisions Not Affected by BAPCPA
1. Lien Perfection Allowed
2. Lifting The Automatic Stay
3. Third Parties
4. Willful Violations
5. ASSUMPTION/REJECTION OF EXECUTORY CONTRACTS
1. Overview
2. Curing Nonmonetary Defaults
3. Other Provisions
6. AVOIDANCE ACTIONS
1. Preference Actions
2. Fraudulent Transfers
7. RECLAMATION
1. Overview
2. Article 2 of the Uniform Commercial Code
3. Reclamation Claims under BAPCPA
8. CREDITORS COMMITTEES
9. NOTICE TO CREDITORS
10. SMALL BUSINESS DEBTOR
11. INVOLUNTARY PETITIONS
12. OTHER CHANGES
1. Exclusive Period for Chapter 11 Debtors to File Plan
2. Time Between Discharges
3. Definition of "Transfer"
4. Appellate Jurisdiction

Abstract

The construction business is a volatile one, and it makes little difference if times are good or bad. Just as unexpected storms can cause delays and problems for a construction project, the bankruptcy of an owner, general contractor or other participant in a construction project can create significant monetary and scheduling problems for others involved in the project. A party who is unfamiliar with the unique, and sometimes complex, bankruptcy process can suffer adverse financial consequences. Thus, it is essential to recognize, anticipate, and imediately act upon issues that arise in a bankruptcy.

To further complicate matters, in April 2005, Congress passed the “Bankruptcy Abuse Prevention and Consumer Protection ACT of 2005”, the most substantial revision of bankruptcy law since the enactment of the Bankruptcy Reform Act of 1978, which established the Bankruptcy Code.

Cases under the Bankruptcy Code involving a construction related business will generally be filed under Chapter 7 (liquidation) or Chapter 11 (reorganization). This outline provides a brief overview of key Bankruptcy Code sections likely to be encountered in a Chapter 7 or Chapter 11 construction case, and the effect of the new revisions on those sections.

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