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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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Another Appellate Court Vacates A Bankruptcy Court Contempt Judgment
By Michael L. Cook
The Southern District of New York vacated a bankruptcy court’s judgment holding a debtor’s business competitor “in contempt for violation of the [Bankruptcy Code’s] automatic stay … and assessing sanctions” of $19.2 million.
What Can We Learn from the FTX Bankruptcy?
By Steven Salkin
The sudden and spectacular crash of crypto-exchange FTX will send long-lasting tremors through both the nation’s financial regulatory and bankruptcy landscapes.
Successor Liability Claims Constitute a ‘Property Interest’ for Purposes of a 363 Sale In Bankruptcy
By Rudolph J. Di Massa Jr. and Malcolm Bates
In In re Norrenberns Foods, the U.S. Bankruptcy Court for the Southern District of Illinois had occasion to rule on a creditor’s objection to the sale of a debtor’s assets.
District Court Provides Guidance on ‘Psychedelic Confusion’
By John J. Rapisardi and Matthew Kremer
The U.S. District Court for the Southern District of New York recently provided critical guidance on what the court observed as the “psychedelic confusion” surrounding the intersection of Bankruptcy Code §365, governing the assumption and rejection of executory contracts, and Bankruptcy Code §503, governing administrative priority.
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