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In June, the U.S. Supreme Court, by unanimous decision, resolved a split amongst five circuits and determined that a 2017 Congressional amendment to the bankruptcy fee provisions was unconstitutional as violating the Bankruptcy Clause of the US. Constitution. See, Siegel v. Fitzgerald, 142 S. Ct. 1770 (2022). The Bankruptcy Clause of the U.S. Constitution empowers Congress to establish “uniform laws on the subject of Bankruptcies throughout the United States.” U.S. Const. art. I, §8, cl. 4. The meaning of “uniform” became the subject of debate in the Siegel case. The Supreme Court concluded that because the 2017 amendments exempted debtors located in two States, it was not “uniform” as it did not apply equally to all debtors regardless of where they were situated and, therefore, the statute was unconstitutional. Siegel, 142 S. Ct. 1770 (2022). A discussion of the Supreme Court’s decision in Siegel, and relevant factual backdrop precipitating such decision, appears below.
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Dip Financing and Liens On Avoidance Actions
By Michael L. Cook
The Eighth Circuit's decision in Simply Essentials has practical significance for Chapter 11 debtor in possession (DIP) lenders. U.S. Trustees and unsecured creditors regularly object to the granting of liens on avoidance actions, but this and other appellate rulings should now eliminate the purported legal obstacle.
Challenges Faced By U.S. Debtors Aiming to Qualify for Chapter 15 Recognition
By Richard J. Bernard and Roya Imani
When restructuring or liquidating a non-U.S.-based company with U.S. operations, practitioners should consider the benefit and efficiency of utilizing the company’s home country laws under a foreign proceeding and a Chapter 15 in the United States.
Second Circuit: Notes Issued from Syndicated Loan Transaction Are Not Securities Under ‘Reves’ Test
By Francis J. Lawall and Marcy J. McLaughlin Smith
In an important recent decision, the U.S. Court of Appeals for the Second Circuit reviewed a $1.7 billion syndicated loan and provided a helpful analytical framework for determining whether applicable securities laws were called into play.
Bankruptcy Court Rules Contract to Produce Documentary Was Not a Personal Services Contract
By Andrew C. Kassner and Joseph N. Argentina Jr.
Bankruptcy courts continue to adjudicate disputes regarding Section 365 of the Bankruptcy Code, which addresses the disposition of executory contracts between the debtor and third parties. And we continue to report on developments in this area. Often the issue involves whether the contract is an executory contract that is subject to being assumed and assigned.
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