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A bankruptcy court properly held that derivative claims based on “piercing the corporate veil theory of liability [were] released under” a confirmed reorganization plan, but that direct “claims for negligent undertaking” were not released and “could be asserted” in state court against the debtors’ equity sponsors (Sponsors). In re Port Neches Fuels, LLC, 2024 WL 1298590, *1 (D. Del. Mar. 27, 2024). The confirmed plan, affirmed by the district court, had released “any and all claims … (including any derivative claims, asserted or assertable on behalf of the Debtors [and] the Reorganized Debtors … against certain released parties,” including the Sponsors. When plaintiffs sued the Sponsors in Texas state court, the defendants asked the bankruptcy court to “enforce the plan, arguing that the plaintiffs’ claims were based on piercing the corporate veil theory of liability, that any such claims belonged to the Debtors’ estates, and accordingly those claims were released under the plan.” Id.
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Court Caps Landlord's Bankruptcy Claim Against Lease Guarantor
By Andrew C. Kassner and Joseph N. Argentina Jr.
A big issue in real estate and retail bankruptcies, among others, involves the disposition of commercial real estate leases, given the potential magnitude of landlord damage claims under state law resulting from a tenant’s default under a long-term lease.
Delaware Bankruptcy Court Rejects Equity Holder's Challenge to Revoke Confirmation Order
By Lawrence J. Kotler
The equity owner asserted that the confirmation order previously entered by the court should be revoked based on the equity owner’s claim that value was lost due to improper sale and marketing efforts by the debtors and its professionals both pre- and post-bankruptcy and, as such, they should have been “in the money” and entitled to a distribution under the confirmed plan.
By George Williams
One of the major catalysts of the “Crypto Winter” that began in 2022 was the collapse of Terraform Labs’s native token LUNA in May 2022. Now two years and a dozen crypto-related bankruptcies later, Terraform Labs has filed for Chapter 11 protection.
Overview of New UAE Bankruptcy Law
By Dario Sabaghi
With the establishment of a specialized Bankruptcy Court and a dedicated Bankruptcy Unit, the introduction of preventive settlements, more flexible restructuring proceedings, and the expansion of potential liability, among other things, the new legislation is set to reshape the approach of law firms.
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