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A Chapter 11 debtor’s “rejection [(under Bankruptcy Code (Code) §365(a)] of a filed-rate [natural gas] contract … relieve[d] it of the obligation to continue performance absent the approval of FERC [(the Federal Energy Regulatory Commission],” held the U.S. Court of Appeals for the Fifth Circuit on March 14, 2022. In re Ultra Petroleum Corp., 2022 WL 763836, *1 (5th Cir. Mar 14, 2022). Moreover, held the court in affirming the bankruptcy court on a direct appeal, Code §1129(a)(6) did not “require the bankruptcy court to seek FERC’s approval before it confirmed [the debtor’s] reorganization plan.” Ultra followed, as expected, the reasoning of its precedent, In re Mirant Corp., 378 F.3d 511 (5th Cir. 2004), and, more important, carefully balanced the power of FERC and the nation’s bankruptcy courts.
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Bankruptcy Risk and Fraud In Cryptocurrency
By J. Eric Wise
Among the risks of cryptocurrency exchanges are bankruptcy risk and fraud, including: the inalienability of account claims, holding an unsecured claim versus an entitlement to the return of coin, and bankruptcy preference risk.
Bankruptcy Court Says Bankruptcy Case Is ‘Filed’ When Uploaded, Not Stamped
By Lawrence J. Kotler and Drew S. McGehrin
The U.S. Bankruptcy Court for the Southern District of New York summed up the importance of the determination as to when a bankruptcy case is actually filed of record, thereby triggering the imposition of the automatic stay and found that the “upload” time of a bankruptcy filing — and not the time physically “stamped” on a bankruptcy petition — determines when a case is commenced. In doing so, the Bankruptcy Court offered direction and guidelines that debtors and creditors will be well advised to observe in future cases.
Fourth Circuit Ruling Underscores Judicial Divide On Use of ‘Texas Two-Step’
By Avalon Zoppo
A sharply divided U.S. Court of Appeals for the Fourth Circuit ruling shielding a nondebtor in bankruptcy proceedings from asbestos lawsuits underscores the wider and growing divide among judges across the country on the bounds of Chapter 11 protection and corporations’ use of the “Texas two-step” to address mass tort litigation.
By Francis J. Lawall and Brenden S. Dahrouge
Chapter 11 cases involving mass tort and complex personal injury claims often require the resolution of novel legal issues that stretch the bounds of existing precedent. As these cases evolve, they can also impact claims against other debtors unrelated to the case at hand through court-approved injunctions, releases or settlements.
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