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The scope of releases obtainable within a Chapter 11 plan remains a hot issue, as evidenced by high-profile cases such as the Boy Scouts and Mallinckrodt. A standard and noncontroversial form of release often found in a plan involves exculpation provisions that typically hold debtor personnel, committee members and their professionals harmless for actions taking in connection with the prosecution of the bankruptcy case itself. In an important recent U.S. Court of Appeals for the Fifth Circuit decision, the court explored whether exculpation provisions protecting more than just the debtor and committee are appropriate. In the same decision, the scope of equitable mootness was considered, and limited to allow the appeal of an order confirming a substantially consummated liquidating plan that was argued (and found) to contain overly broad exculpation relief. See, Highland Capital Management v. NexPoint Advisors, No. 21-10449 (5th Cir. Aug. 19, 2022).
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By Erich N. Durlacher
What Should Financial Institutions Do Now In Anticipation of a Potential (and Long-Awaited) Downturn
What should a prudent lender be doing right now to “brace” itself for the coming financial uncertainty? Adopt a five-point “CAPER” strategy: Communicate, Analyze, Preserve, Execute, and Resolve.
By Michael L. Cook
“… [B]ecause Congress has not clearly abrogated the solvent-debtor exception,” the U.S. Court of Appeals for the Fifth Circuit held that a reorganized solvent debtor had to “pay what it promised now that it is financially capable.”
By Sean J. Coughlin and Vivian B. Isaboke
It comes as no surprise that the crypto winter has reinforced the perception of critics that digital currencies are “risky, flawed and unproven digital financial instruments.” This article analyzes the state of the cryptocurrency market and examines the impact of cybercrimes and crypto bankruptcies on the current market.
By Charles M. Tatelbaum and Corey D. Cohen
A recent decision from the U.S. Court of Appeals for the Sixth Circuit may be creating a tsunami of concern to those that represent bankruptcy trustees. The decision, in essence, takes an hourly fee arrangement between the trustee and the trustee’s attorneys and adds a results-based contingency to the approval of any fee payment authorization by the bankruptcy court.