BarbriSFCourseDetails
  1. keyboard_arrow_leftBack

Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Real Property - Transactions

Date & Time
  • event Date

    Thursday, October 26, 2023

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$297.00
CLE
ALL

This CLE webinar will describe preference demands in bankruptcy and the financial effects these demands made by bankrupt construction project participants may have on their non-bankrupt project partners. The panel will discuss Section 547(c) defenses for preference demand recipients as well as noteworthy state law defenses with unique considerations for the construction industry. The panel will also provide best practices for assisting clients in preparing for and responding to preference demands.

Faculty

Karalynn Cromeens
Owner and Managing Partner
The Cromeens Law Firm, PLLC

Ms. Cromeens holds more than 17 years of experience practicing construction, real estate, and business law. She has successfully filed more than a thousand lawsuits to foreclose or remove mechanic’s liens, with several of those being tried to a jury. Ms. Cromeens is on a mission to educate and inform subcontractors on the importance of understanding what they are signing, negotiating a fair subcontract, and understanding their lien and collections rights.

expand_circle_down Expand to View Full Bio expand_circle_up Collapse Bio
Carol Sigmond
Partner
Greenspoon Marder

With more than four decades of legal experience, Ms. Sigmond focuses her practice on construction industry matters, including arbitration, appeals, bid protests, contract preparation, mediation, litigation, and suretyship. She represents clients in construction defect litigation relating to issues that arise when adjacent owners develop their properties, as well as expediting a builder’s construction project by ensuring that the proper contracts are in place. As a seasoned practitioner, Ms. Sigmond has a history of litigating construction disputes for public works and buildings in both the public and private sectors. She also has extensive knowledge preparing contract documents, including design-build, construction management, guaranteed maximum price, and fixed-price contracts. Ms. Sigmond is a former Vice President of the New York State Bar Association and a former President of the New York County Lawyers Association and is also a frequent speaker and has authored a number of legal publications relating to construction law.

expand_circle_down Expand to View Full Bio expand_circle_up Collapse Bio
John Sparacino
Principal
Mckool Smith PC

Mr. Sparacino has more than 30 years' experience handling complex bankruptcy-related matters, including litigation, receiverships, and out-of-court restructurings. He has represented clients in bankruptcy matters throughout the U.S., including secured and unsecured creditors, ad hoc creditors’ committees, statutory creditors’ committees, trustees, equity security holders, companies reorganizing under Chapter 11, DIP lenders, and purchasers of distressed assets and companies. Mr. Sparacino also represents purchasers and sellers of assets, claims and equity interests in distressed situations. In addition, he has represented indenture trustees in connection with bond debt transactions, including new issuances, tender offers, exchange offers, redemptions, amendments, workouts, and bankruptcies. His experience spans several industries, including energy, manufacturing, financial services, technology, and real estate, among others.

expand_circle_down Expand to View Full Bio expand_circle_up Collapse Bio

Description

In an unstable commercial real estate market, construction project participants may be faced with one of their project partners filing for bankruptcy. One project participant's bankruptcy has rippling effects that can be detrimental to the whole project.

Once a party files for bankruptcy (the debtor), an automatic stay prohibits creditors--including those with whom the debtor is involved in a project--from seeking further payments. However, the debtor also has the ability to "clawback" or demand the return of all payments made by the debtor to their creditors during the 90-day period leading up to the bankruptcy filing (preference demands). This means that non-bankrupt project participants may suffer the financial consequences of not only possibly forfeiting future payments but also returning past payments unless they have a viable defense.

Bankruptcy Code Section 547(c) provides defenses to preference demands that can reduce or eliminate liability for non-bankrupt project participants. State laws provide additional defenses. Construction counsel should be aware of these defenses and how to advise their clients to prepare for and respond to preference demands.

Listen as our expert panel discusses the effects of preference demands on non-bankrupt construction project participants. The panel will describe federal defenses to these demands, including those in Section 547(c), and notable state law defenses. The panel will also provide best practices for assisting clients to prepare for and respond to preference demands.

Outline

  1. Introduction: overview of current real estate market and effect on construction projects
  2. Possible financial effects of project partner's bankruptcy on non-bankrupt project participants
  3. Preference demands
  4. Preference demand defenses
    • Section 547(c) defenses
    • Other federal defenses
    • Noteworthy state considerations and defenses
  5. Insurance and surety bond considerations
  6. Best practices

Benefits

The panel will review these and other important considerations:

  • What are possible financial repercussions that a project partner's bankruptcy may have on non-bankrupt project participants?
  • What are the federal defenses to preference demands, including Section 547(c) defenses?
  • What are state law considerations and noteworthy defenses?
  • Under what circumstances should certain defenses be used when responding to preference demands?
  • Are there any insurance and/or surety bond considerations?
  • How can counsel help their clients prepare for possible preference demands when they first learn of a project partner's bankruptcy?