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The Southern District of New York vacated a bankruptcy court’s judgment holding a debtor’s business competitor (C) “in contempt for violation of the [Bankruptcy Code’s] automatic stay … and assessing sanctions” of $19.2 million. In re Windstream Holdings, Inc., 2022 WL 5245633, *1 (2) (S.D.N.Y. Oct 6, 2022). The bankruptcy court had erroneously sanctioned C for a “literally false and intentionally misleading advertising campaign” to lure subscribers away from the debtor, mistakenly reasoning that C’s advertisements violated the automatic stay by suggesting the debtor was going out of business. Id. According to the district court, though, C’s “advertisements did not violate the … stay, and, in any case, there was a fair ground of doubt whether they did so.” Id. at *3.
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By Amanda Bronstad
On Jan. 30, the U.S. Court of Appeals for the Third Circuit reversed a bankruptcy judge's decision, concluding that Johnson & Johnson subsidiary LTL Management was not in financial distress at the time it filed its Chapter 11 case in 2021.
Eleventh Circuit Stops Plan Confirmation Stampede
By Michael L. Cook
In a recent ruling, the Eleventh Circuit upended a hastily confirmed reorganization plan. Its holding should stop the stampede known as the “confirmation express.”
Treating Student Loan Debt Relief By Standardizing 'Undue Hardship' In Bankruptcy Code
By Rudolph J. Di Massa and Diane J. Kim
On Aug. 24, 2022, President Joe Biden announced the plan to forgive up to $10,000 in federal student debt for qualifying borrowers. This relief, however, was challenged in the courts and is now pending before the U.S. Supreme Court.
Duties of and Risks to Directors and Officers of Insolvent Enterprises
By Marshall S. Huebner and Amber Leary
Traditionally, the bankruptcy risk for D&Os has been fairly low. Several recent developments have, however, shifted the landscape somewhat and altered the risk profile.
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