In this problem:
The year of bankruptcy: 2021
A brief chronicle of the year’s notable developments in bankruptcy and corporate restructuring, including corporate bankruptcy filings, major court decisions and bankruptcy legislation. [read more
Delaware District Court Says Dismissal Eliminates Non-Debtor’s Exclusive Right to Provide Services to Debtor
In Caliber North Dakota, LLC vs. Nine Point Energy Holdings, Inc. (In re Nine Point Energy Holdings, Inc.), 2021 WL 3269210 (D. Del. July 30, 2021), the U.S. District Court for the District of Delaware held that the U.S. Supreme Court’s decision in
Mission Product Holdings, Inc. v. Tempnology, LLC, 139 S.Ct. 1652 (2019), did not apply to preserve the exclusive right of a non-debtor contracting party to provide intermediary services to the debtor after the debtor rejected the contract in bankruptcy. The case is an important clarification of the implications of
mission product because it confirms that the creative contract cannot prevent a debtor from exercising and benefiting from his rights of withdrawal under the Bankruptcy Code.
Eleventh Circuit Revisits Doctrine of Statutory Moot in Bankruptcy Sales
In Reynolds v ServisFirst Bank (In re Stanford), 17 F.4th 116 (11th Cir. 2021), two of three judges on a panel of the United States Court of Appeals for the Eleventh Circuit ruled that an unsuspended order approving a sale to a buyer of good faith is moot on appeal, even if the sale has not been duly authorized under the Bankruptcy Code. A concurring judge reached the same result, but for a different reason, as he determined that the debtors were barred from contesting a sale they had requested.
Florida Bankruptcy Court Rules Foreign Debtor Doesn’t Need to Have U.S. Residence, Assets, or Place of Business to Qualify for Chapter 15 Recognition
In In re Talal Qais Abdulmunem al Zawawi, 2021 WL 3890597 (Bankr. MD Fla. Aug. 31, 2021), the U.S. Bankruptcy Court for the Intermediate District of Florida distanced itself from a 2013 decision of the U.S. Court of Appeals for the Second Circuit, finding that, as Debtors In cases under other chapters of the Bankruptcy Code, a Chapter 15 debtor must reside or have assets or establishment in the United States to be eligible for Chapter 15 relief. According to the bankruptcy court , Chapter 15 has its own eligibility requirements, and debtor eligibility requirements in cases under other chapters of the Bankruptcy Code do not apply in Chapter 15 cases. [read more
Another New York District Court Expands Safe Harbor of Bankruptcy Code Security Contract
In Holliday, liquidator of the BosGen Liq. Trust v. Credit Suisse Art. (USA) LLC, 2021 WL 4150523 (SDNY September 13, 2021), appeal lodged, No. 21-2543 (2d Cir. Oct. 8, 2021), the U.S. District Court for the Southern District of New York upheld a bankruptcy court ruling that: (i) Section 546(e) prevails over intentional fraudulent transfer claims under state law because the intentional fraud exception expressly included in the provision of section 546(e) applies only to intentional fraudulent transfer claims under the federal law; and (ii) payments made to members of debtors of a limited liability company in a pre-bankruptcy recapitalization transaction were protected from reversal under section 546(e) because at the purposes of this article, the debtors were “financial institutions”, as customers of the banks which acted as depositaries and agents in connection with the transaction. [read more
Florida bankruptcy court defers to Brazilian court to dismiss Chapter 15 adversarial proceeding
In In re Varig Logistica SA, 2021 WL 5045684 (Bankr. SD Fla. Oct. 29, 2021), the U.S. Bankruptcy Court for the Southern District of Florida has dismissed adversarial proceedings in the Chapter 15 case of a Brazilian airline that went bankrupt due to pending litigation on the same issues in a Brazilian court. As a matter of comity, the U.S. Bankruptcy Court determined that the Brazilian court was better placed to decide whether the claims brought by the Chapter 15 debtor’s foreign representative were barred by the releases granted by the debtor prior to the commencement of its bankruptcy proceedings. Brazilian and American bankruptcy. [read more
Delaware Bankruptcy Court: No Implied Assumption of Enforceable Contracts in Bankruptcy
The ability of a trustee in bankruptcy or a debtor in possession of Chapter 11 to assume, assume and assign or reject enforceable contracts and unexpired leases is an important tool designed to promote a “fresh start for debtors and to maximize the value of bankruptcy. heritage for the benefit of all stakeholders. However, the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure establish strict requirements for the assumption, rejection, and assignment of contracts and leases. The United States Bankruptcy Court for the District of Delaware considered the consequences of failure to comply with these requirements in In re Dura Auto. Sys., SARL, 628 BR 750 (Bankr. D. Del. 2021). The court confirmed that the United States Court of Appeals for the Third Circuit, like the majority of other courts that have decided the issue, has rejected the doctrine of “implied assumption” of enforceable contracts in bankruptcy cases. .
worthy of interest
Heather Lennox (Cleveland and New York) was named Global Practice Leader of Jones Day’s Business Restructuring & Reorganization Practice. Heather has been a partner in the firm’s BRR practice since 2002 and has led some of the most significant restructuring cases in the United States over the past two decades, including work for the City of Detroit, Peabody Energy, Hostess Brands and FTDs. . She is a member of the National Bankruptcy Conference, which advises Congress on national bankruptcy policy, and a Fellow of the American College of Bankruptcy. She has been the partner in charge of the firm’s Cleveland office since 2016. She succeeds Bruce Bennett (Los Angeles and New York), who has led Jones Day’s BRR practice since 2016, and will continue to advise clients as a practice partner.
Jones Day recently hosted Oliver S. Zeltner (Cleveland) and T. Daniel Reynolds (Cleveland) partnership in its business restructuring and reorganization practice.
An article written by Corinne Ball (New York) titled “District Court Rejects Non-Consensual Third-Party Releases in Purdue Pharma Plan; While Plaintiffs Return to the Race to the Courthouse, Distress Investors Will Reap Opportunities” was published in the December 22, 2021 edition of New York Law Review.
Roger Dobson (Sydney) received a Band 1 ranking in the area of Restructuring/Insolvency in the 2022 edition of Asia-Pacific Rooms.
Colleen E. Laduzinski (Tax; Boston)was appointed as a Conferee to the National Bankruptcy Conference, a select group of nationally recognized practitioners, scholars, and judges who are often called upon to advise Congress and executive branch agencies on bankruptcy policy issues.
Juan Ferré (Madrid) was recognized in the 2022 edition of The best lawyers in Spain” in the field of practice “Banking and financial law; Insolvency and Reorganization Law.”
An article written by Charles M. Oellermann (Columbus) andMark G. Douglas (New York) titled “Case Update: Second Circuit Breathes New Life Into Madoff Trustee’s Efforts to Recover Ponzi Scheme Payments” was published in the December 2021 issue of Wall Street Lawyer.
An article written by Mark A. Cody (Chicago) and Mark G. Douglas (New York) entitled “Another Bankruptcy Court Joins the Debate on the Validity of Bankruptcy Blocking Restrictions” was published on October 25, 2021 in Lexis practical guide.
An article written by Paul M. Green (Houston) and Mark G. Douglas (New York) entitled “Another Bankruptcy Court Rules the Solvent Debtor Exception Survived Enactment of the Bankruptcy Code” was published on October 26, 2021 in Lexis practical guide.
An article written by Dan T. Moss (Washington), Taylre C. Janak, and Mark G. Douglas (New York) titled “An Equitable Tightrope: Blackjewel’s Balancing Act on After-Acquired Property in Bankruptcy” was published on October 27, 2021 in Lexis practical guide.
An article written by Corinne Ball (New York), Dan T. Moss (Washington), Michael C. Schneidereit (New York), Isel M. Perez (Miami), and Mark G. Douglas (New York) entitled “New York Bankruptcy Court Rules that Good Faith Is Not the Gatekeeper to Chapter 15” published in December 2021 INSOL News Update.
Kevyn D. Orr (Washington),
Corinne Ball (New York),
Bruce Bennett (New York and Los Angeles),
Carl E. Black (Cleveland),
Jeffrey B. Ellman (Atlanta),
Brad B. Erens (Chicago),
Gregory M. Gordon (Dallas),
Heather Lennox (Cleveland),
Joshua M. Mester (Los Angeles), and
Charles M. Oellermann (Columbus) have been presented in the practice area “Corporate Restructuring and Reorganization” or “Bankruptcy and Financial Restructuring” in the 2022 Lawdragon 500 Leading Bankruptcy and Restructuring Lawyers.
Attachments – Corporate Restructuring Review January-February 2022.pdf
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.