Bankruptcy Issues Affecting Joint Ventures

Joint ventures (JV), formed by two or more JV members or partners who agree to work together on a project, face unique issues in the bankruptcy context. The JV may be formed to complete a single program or project (and is dissolved thereafter), or it may be formed as an ongoing enterprise to compete...

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Bibliographic Details
Published in:American Bankruptcy Institute journal 2010-11, Vol.29 (9), p.48
Main Authors: Currie, Andrew J, Burgers, Kristen
Format: Article
Language:English
Subjects:
Agreements
Assets
Bank accounts
Bankruptcy
Bankruptcy reorganization
Collateral
Consent
General partners
Joint ventures
Limited liability companies
Litigation
Petitions
Provisions
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Summary:Joint ventures (JV), formed by two or more JV members or partners who agree to work together on a project, face unique issues in the bankruptcy context. The JV may be formed to complete a single program or project (and is dissolved thereafter), or it may be formed as an ongoing enterprise to compete for and perform on numerous programs or projects. It is likely that at some point during its lifecycle, the JV will be affected by bankruptcy-related issues. Two typical scenarios include: 1. the JV itself files for bankruptcy or 2. one or more of the JV members files for bankruptcy. The filing will have a profound negative impact on the JV, so the members should include provisions and set out procedures in the JV agreement that the JV will follow in a bankruptcy. The JV members should develop a protocol for separately identifying JV property so that such property is not deemed "property of the estate" when one of the JV members files for bankruptcy.
ISSN:1931-7522