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The provisions of the Bankruptcy Code sometimes conflict with other federal laws and regulations. A debtor that operates in a highly regulated industry often faces additional hurdles in administering its bankruptcy case that would be routine in other Chapter 11 proceedings. Conversely, a regulated debtor might find the Bankruptcy Code enables it to avoid an otherwise inevitable regulatory consequence. The U.S. Court of Appeals for the Sixth Circuit Court recently considered whether an energy company debtor could reject a power purchase agreement as an executory contract that had been filed with the Federal Energy Regulatory Commission (FERC). Outside of bankruptcy, the debtor’s ability to address the contract would fall under FERC’s exclusive jurisdiction. Here, the bankruptcy court ruled that FERC had no jurisdiction, and the bankruptcy court had exclusive jurisdiction to adjudicate the matter. The Sixth Circuit court rejected that position, and ruled that the bankruptcy court and FERC have concurrent jurisdiction. The opinion was issued on Dec. 12, 2019, in the case of In re FirstEnergy Solutions, Case Nos. 18-3787/3788/4095/4097/4107/4110.
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By Louis F. Solimine, James J. Henderson and Andrew L. Turscak, Jr.
In a recent, unanimous opinion authored by Justice Ginsburg, the U.S. Supreme Court affirmed lower court decisions holding that a bankruptcy court order denying a motion for relief from the automatic stay constitutes a final order that must be appealed within the time provided under Federal Rule of Bankruptcy Procedure 8002.
By Rudolph J. Di Massa, Jr. and Geoffrey A. Heaton
The U.S. Bankruptcy Court for the Western District of Virginia recently denied creditors’ counsel’s motion for a fee enhancement under the “common fund doctrine,” finding it could not award the requested fees absent statutory authority.
By Lawrence J. Kotler
In the case of In re Solutions Liquidation, the U.S. Bankruptcy Court for the District of Delaware adjudicated a motion to dismiss filed by the debtors’ former managers and officers in connection with the breach of fiduciary duty complaint filed against them by the trustee of the debtors’ liquidating trust.
By John J. Rapisardi and Joseph Zujkowski
Plan support agreements are often an essential component of a successful complex Chapter 11 reorganization and provide a framework for a debtor’s financial restructuring. These agreements have increasingly been used to induce core groups of major lenders and bondholders to support a debtor’s restructuring in return for enhanced recoveries.