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Bankruptcy Litigation

Bankruptcy Court Gives Pre-Petition Antitrust Claims Administrative Priority Status

The Delaware District Bankruptcy Court ruled that claims arising from pre-petition antitrust cases filed against the debtor could constitute post-petition claims entitled to administrative priority status. The court held that the public policy that favors a “fresh start” for debtors would not preclude damages from post-petition sales of products in violation of federal antitrust laws from receiving administrative expense priority.

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As we ring in the New Year, we hope for a “fresh start” out of the pandemic, but recognize that challenges remain, including the latest variant. In the restructuring bar, we see new approaches being attempted to address old problems. And courts continue to be asked to adjudicate these matters. One of the hottest areas of law practice today is antitrust. So today we decided to report on a decision issued by U.S. Bankruptcy Judge John T. Dorsey of the U.S. Bankruptcy Court for the District of Delaware in In re Mallinckrodt, Case No. 20-12522 (JTD), where the court was asked to decide whether claims arising from pre-petition antitrust cases filed against the debtor could constitute post-petition claims entitled to administrative priority status. In a decision issued on Oct. 19, 2021, the court ruled they could, and the public policy that favors a “fresh start” for debtors would not preclude damages from post-petition sales of products in violation of federal antitrust laws from receiving administrative expense priority.

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