https://urgentcomm.com/wp-content/themes/ucm_child/assets/images/logo/footer-new-logo.png
  • Home
  • News
  • Multimedia
    • Back
    • Multimedia
    • Video
    • Podcasts
    • Galleries
    • IWCE’s Video Showcase
    • IWCE 2022 Winter Showcase
    • IWCE 2023 Pre-event Guide
  • Commentary
    • Back
    • Commentary
    • Urgent Matters
    • View From The Top
    • All Things IWCE
    • Legal Matters
  • Resources
    • Back
    • Resources
    • Webinars
    • White Papers
    • Reprints & Reuse
  • IWCE
    • Back
    • IWCE
    • Conference
    • Special Events
    • Exhibitor Listings
    • Premier Partners
    • Floor Plan
    • Exhibiting Information
    • Register for IWCE
  • About Us
    • Back
    • About Us
    • Contact Us
    • Advertise
    • Terms of Service
    • Privacy Statement
    • Cookie Policy
  • Related Sites
    • Back
    • American City & County
    • IWCE
    • Light Reading
    • IOT World Today
    • Mission Critical Technologies
    • TU-Auto
  • In the field
    • Back
    • In the field
    • Broadband Push-to-X
    • Internet of Things
    • Project 25
    • Public-Safety Broadband/FirstNet
    • Virtual/Augmented Reality
    • Land Mobile Radio
    • Long Term Evolution (LTE)
    • Applications
    • Drones/Robots
    • IoT/Smart X
    • Software
    • Subscriber Devices
    • Video
  • Call Center/Command
    • Back
    • Call Center/Command
    • Artificial Intelligence
    • NG911
    • Alerting Systems
    • Analytics
    • Dispatch/Call-taking
    • Incident Command/Situational Awareness
    • Tracking, Monitoring & Control
  • Network Tech
    • Back
    • Network Tech
    • Interoperability
    • LMR 100
    • LMR 200
    • Backhaul
    • Deployables
    • Power
    • Tower & Site
    • Wireless Networks
    • Coverage/Interference
    • Security
    • System Design
    • System Installation
    • System Operation
    • Test & Measurement
  • Operations
    • Back
    • Operations
    • Critical Infrastructure
    • Enterprise
    • Federal Government/Military
    • Public Safety
    • State & Local Government
    • Training
  • Regulations
    • Back
    • Regulations
    • Narrowbanding
    • T-Band
    • Rebanding
    • TV White Spaces
    • None
    • Funding
    • Policy
    • Regional Coordination
    • Standards
  • Organizations
    • Back
    • Organizations
    • AASHTO
    • APCO
    • DHS
    • DMR Association
    • ETA
    • EWA
    • FCC
    • IWCE
    • NASEMSO
    • NATE
    • NXDN Forum
    • NENA
    • NIST/PSCR
    • NPSTC
    • NTIA/FirstNet
    • P25 TIG
    • TETRA + CCA
    • UTC
Urgent Communications
  • NEWSLETTER
  • Home
  • News
  • Multimedia
    • Back
    • Video
    • Podcasts
    • Omdia Crit Comms Circle Podcast
    • Galleries
    • IWCE’s Video Showcase
    • IWCE 2023 Pre-event Guide
    • IWCE 2022 Winter Showcase
  • Commentary
    • Back
    • All Things IWCE
    • Urgent Matters
    • View From The Top
    • Legal Matters
  • Resources
    • Back
    • Webinars
    • White Papers
    • Reprints & Reuse
    • UC eZines
    • Sponsored content
  • IWCE
    • Back
    • Conference
    • Why Attend
    • Exhibitor Listing
    • Floor Plan
    • Exhibiting Information
    • Join the Event Mailing List
  • About Us
    • Back
    • About Us
    • Contact Us
    • Advertise
    • Cookie Policy
    • Terms of Service
    • Privacy Statement
  • Related Sites
    • Back
    • American City & County
    • IWCE
    • Light Reading
    • IOT World Today
    • TU-Auto
  • newsletter
  • In the field
    • Back
    • Internet of Things
    • Broadband Push-to-X
    • Project 25
    • Public-Safety Broadband/FirstNet
    • Virtual/Augmented Reality
    • Land Mobile Radio
    • Long Term Evolution (LTE)
    • Applications
    • Drones/Robots
    • IoT/Smart X
    • Software
    • Subscriber Devices
    • Video
  • Call Center/Command
    • Back
    • Artificial Intelligence
    • NG911
    • Alerting Systems
    • Analytics
    • Dispatch/Call-taking
    • Incident Command/Situational Awareness
    • Tracking, Monitoring & Control
  • Network Tech
    • Back
    • Cybersecurity
    • Interoperability
    • LMR 100
    • LMR 200
    • Backhaul
    • Deployables
    • Power
    • Tower & Site
    • Wireless Networks
    • Coverage/Interference
    • Security
    • System Design
    • System Installation
    • System Operation
    • Test & Measurement
  • Operations
    • Back
    • Critical Infrastructure
    • Enterprise
    • Federal Government/Military
    • Public Safety
    • State & Local Government
    • Training
  • Regulations
    • Back
    • Narrowbanding
    • T-Band
    • Rebanding
    • TV White Spaces
    • None
    • Funding
    • Policy
    • Regional Coordination
    • Standards
  • Organizations
    • Back
    • AASHTO
    • APCO
    • DHS
    • DMR Association
    • ETA
    • EWA
    • FCC
    • IWCE
    • NASEMSO
    • NATE
    • NXDN Forum
    • NENA
    • NIST/PSCR
    • NPSTC
    • NTIA/FirstNet
    • P25 TIG
    • TETRA + CCA
    • UTC
acc.com

Legal Matters


Commentary

What RCC Consultants’ Chapter 11 bankruptcy filing means to customers

What RCC Consultants’ Chapter 11 bankruptcy filing means to customers

Last week, RCC Consultants filed for Chaper 11 bankruptcy protection. Jeffrey Rubin, an attorney who practices bankruptcy and telecommunications law at Shulman Rogers, and Alan Tilles, chairman of Shulman Rogers' telecommunications department, explain what the bankruptcy action means to customers of RCC Consultants.
  • Written by
  • 9th May 2015

           On May 1, 2015, RCC Consultants (RCC) filed a voluntary chapter 11 bankruptcy proceeding in the United States Bankruptcy Court for the District of New Jersey. Because many municipalities across the country could be impacted by this filing, IWCE’s Urgent Communications Editor Donny Jackson asked Jeffrey Rubin, an attorney who practices bankruptcy and telecommunications law at Shulman Rogers, and Alan Tilles, chairman of Shulman Rogers’ telecommunications department, about the filing. In Part 1, we explore the impact of the filing on RCC Consultants’ customers.

1.What is a Chapter 11 bankruptcy filing?

A Chapter 11 bankruptcy is when the debtor—in this case, RCC—is allowed to continue its business operations in the ordinary course while attempting to reorganize its business and financial affairs free from the duress and financial pressure of its creditors. When a bankruptcy proceeding is commenced, the debtor obtains the benefit of an automatic stay from any litigation, lien enforcement and other actions by creditors attempting to collect on their respective debts. It also stays actions that would affect or interfere with property of the debtor’s estate. The automatic stay is very broad and gives the debtor breathing room to focus its efforts on its reorganization prospects.

2.What happens to the contract between RCC and the customer as a result of the bankruptcy filing?

Because the case is in its very early stages, our knowledge of this specific case is limited. Generally, if the contract was in existence as of May 1, 2015 (the date of the filing), the bankruptcy proceeding does not change the legal status of the contract between the parties. If the contract is deemed to be an “executory contract,” then—in accordance with Section 365 of the United States Bankruptcy Code—RCC can either assume or reject the contract, subject to bankruptcy-court approval. Whether RCC Consultants assumes or rejects the contract will be determined after it conducts an analysis of what is in the best interests of RCC, its estate and its creditors as it strives to reorganize.

3.Will RCC assume or reject my contract?

That depends on the individual case. RCC will conduct an independent analysis of each contract to determine whether or not it is beneficial or burdensome to its reorganization efforts to assume or reject a particular contract. Generally, one would suppose that RCC would want to assume existing customer contracts for consulting purposes for the income to be generated from such contracts for RCC’s benefit.

4.What if my contract is assumed by RCC?

If RCC assumes the contract, then the contract continues in accordance with its terms. 

5.What if RCC was in default of the contract as of May 1, 2015?  Can RCC still assume the contract?

Yes, but only if RCC is able to show the following:

  1. RCC cures the default or provides adequate assurance that the default will be promptly cured;
  2. RCC compensates or provides adequate assurance that RCC will promptly compensate the customer for pecuniary loss to the customer resulting from the default; and
  3. RCC provides adequate assurance of future performance under the contract.

It should be noted that the above requirements do not apply to a default under a contract that constitutes a breach of a provision contained in such contract relating to insolvency or financial condition of RCC, the commencement of a bankruptcy case by RCC or the appointment of a trustee or custodian for RCC for the benefit of RCC’s creditors or similar provisions.

6.What if RCC rejects the contract?

Generally, the rejection of an executory contract by RCC constitutes a breach of such contract immediately before the date of the filing of the petition (in this case, April 30, 2015).  The customer will then in all likelihood be a general unsecured creditor in the bankruptcy proceeding and damages under the contract will be determined as of the petition date, not the rejection date.

7.When must RCC make the decision to assume or reject?

With respect to a general contract for consulting services, RCC may assume or reject the contract at any time before confirmation of a plan of reorganization or as part of such a plan of reorganization. If RCC desires to assume or reject before plan confirmation, it may do so by motion and notice to all relevant parties. If the customer has valid reasons, the customer can try to force the issue by filing its own motion to compel RCC to assume or reject the specific contract within a certain time period.

8.What happens if the contract is neither assumed nor rejected during the bankruptcy?

Section 365 provides that the debtor may assume or reject the contract. What if RCC takes no action? In such an event, the contract is deemed to “ride through” the Chapter 11 bankruptcy proceeding. An existing contract that is not assumed in the bankruptcy proceeding is not deemed to be rejected.  Assuming that the plan is also silent, the contract will “ride through” the bankruptcy and continue to exist thereafter.

9.What contracts are covered under Section 365 of the Bankruptcy Code?

Section 365 only covers executory contracts. Also, Section 365(c) provides that a debtor may not assume or assign any executory contract if “applicable law excuses a party, other than the debtor, to such contract . . . from accepting performance from or rendering performance to an entity other than the debtor . . ., whether or not such contract . . . prohibits or restricts assignment of rights or delegation of duties and such party does not consent to such assumption or assignment.” For example, a contract may not be assumed or assigned, if the contract provides or requires the services of a particular person or such services are unique and cannot be performed by someone else.

10. Can a municipality cancel an existing contract?

Without having reviewed a contract for the specifics of that situation, it can be said that a customer of RCC would need a compelling reason or justification to file a motion with the bankruptcy court to compel RCC to assume (and if applicable cure) or reject the contract within a specified period. Unless there are special provisions in the contract or otherwise that would preempt the bankruptcy code allowing cancellation, of which we are not aware, the motion to compel would be the proper course of action.

For further information, please contact Jeffrey W. Rubin at [email protected]rogers.com or Alan S. Tilles at [email protected].

 

 

 

Tags: Commentary Policy Legal Matters Commentary

Most Recent


  • Microsoft Outlook vulnerability could be 2023's 'It' bug
    Microsoft recently patched a zero-day vulnerability under active exploit in Microsoft Outlook, identified as CVE-2023-23397, which could enable an attacker to perform a privilege escalation, accessing the victim’s Net-NTLMv2 challenge-response authentication hash and impersonating the user. Now it’s becoming clear that CVE-2023-23397 is dangerous enough to become the most far-reaching bug of the year, security researchers are […]
  • State and local leaders can alleviate the burden on public-safety personnel by tackling three workforce trends
    Government officials and public safety leaders wear many different hats. They serve as sounding boards for constituent complaints and for new ideas that need vetting. They are change agents charged with improving the lives of citizens and colleagues and are tasked with keeping order. Their most daunting responsibility, however, is keeping members of their community […]
  • Telcos need to build businesses, as well as networks
    Telcos are over-invested in 5G in every sense of the phrase. The latest mobile generation has fallen well short of expectations, as recent numbers from analyst firm MTN Consulting attest. Total operator revenue actually declined in the second and third quarters last year, largely as a result of weak service revenues, MTN found. In Q3, for […]
  • Get ready for the summer of spectrum squabbling
    Last week, for the first time ever, Congress allowed the FCC’s spectrum auction authority to lapse – a development that prevents the agency from auctioning more spectrum to 5G network operators. At roughly the same time last week, President Joe Biden’s Democratic nominee to the FCC, Gigi Sohn, abruptly withdrew from contention without any clear replacement. That leaves the […]

Related Content

  • What RCC Consultants’ Chapter 11 bankruptcy filing means to customers
  • What RCC Consultants’ Chapter 11 bankruptcy filing means to customers
  • What RCC Consultants’ Chapter 11 bankruptcy filing means to customers
  • What RCC Consultants’ Chapter 11 bankruptcy filing means to customers

Commentary


Updated: How ‘sidelink’ peer-to-peer communications can enhance public-safety operations

  • 1
27th February 2023

NG911 needed to secure our communities and nation

24th February 2023

How 5G is making cities safer, smarter, and more efficient

26th January 2023
view all

Events


UC Ezines


IWCE 2019 Wrap Up

13th May 2019
view all

Twitter


UrgentComm

State and local leaders can alleviate the burden on public-safety personnel by tackling three workforce trends dlvr.it/SlBH89

20th March 2023
UrgentComm

6G is shaping up to disappoint, and the industry can blame itself dlvr.it/Sl918J

20th March 2023
UrgentComm

Change is coming to the network detection and response (NDR) market dlvr.it/Sl4cts

18th March 2023
UrgentComm

Telcos need to build businesses, as well as networks dlvr.it/Sl4cRR

18th March 2023

Newsletter

Sign up for UrgentComm’s newsletters to receive regular news and information updates about Communications and Technology.

Expert Commentary

Learn from experts about the latest technology in automation, machine-learning, big data and cybersecurity.

Business Media

Find the latest videos and media from the market leaders.

Media Kit and Advertising

Want to reach our digital and print audiences? Learn more here.

DISCOVER MORE FROM INFORMA TECH

  • American City & County
  • IWCE
  • Light Reading
  • IOT World Today
  • Mission Critical Technologies
  • TU-Auto

WORKING WITH US

  • About Us
  • Contact Us
  • Events
  • Careers

FOLLOW Urgent Comms ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookie Policy
  • Terms
Copyright © 2023 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.