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A bankruptcy court gave “unnecessary and likely incorrect” reasoning to support its “excessively broad proposition that sales free and clear under [Bankruptcy Code (“Code”)] Section 363 override, and essentially render nugatory, the critical lessee protections against a debtor-lessor under [Code] 365(h),” said the U.S. Court of Appeals for the Fifth Circuit on Feb. 16, 2022. In re Royal Bistro, LLC, 2022 WL 499938, *1-*2 (5th Cir. Feb. 16, 2022). The court still denied the lessees’ “motion for a writ of mandamus” for a “stay pending appeal” from a bankruptcy court order authorizing the trustee’s sale of “the debtor’s real property … free and clear” of the lessees’ interests. Id. at *1. In essence, though, the Fifth Circuit signaled that it would not approve in later cases a bankruptcy court asset sale of real property that summarily cuts off the rights of the debtor’s lessees.
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By Gerard S. Catalanello and Kimberly (Kodis) Schiffman
A summary of the factors that courts have considered and will likely continue to consider when addressing dischargeability of private student loans under subsection 523(a)(8)(A)(ii) of the Bankruptcy Code, and a cautionary word for practitioners considering whether to put forth an argument to the contrary.
By William (Bill) Lobel
Cyclical challenges in the economy are nothing new to bankruptcy attorneys and their clients, and 2022 is shaping up to be that kind of year for business owners nationwide. This is likely to result in a greater need for the services of bankruptcy attorneys as business owners face a mounting wave of distressed financial assets.
By Douglas S. Mintz and Michael L. Cook
A Chapter 11 debtor’s “rejection [(under 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.
By Francis J. Lawall and Suzanne Soboeiro
Third-party releases are often incorporated into the bankruptcy plan as a means of protecting nondebtor parties from litigation that is directly or even tangentially related to the debtor’s business. Over the last several years, the scope and use of such third-party releases appears to have been stretched arguably to the breaking point as demonstrated in a recent and important district court decision.