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Should a bankruptcy court’s preliminary injunction be subject to appellate review? Taking the negative position, the U.S. District Court for the Eastern District of New York recently held that it had the “discretion … to decline to hear” an appeal from a bankruptcy court’s preliminary injunction. Navient Solutions, LLC et al. v. Homaidan et al., 2022 WL 17252459, *4 (E.D.N.Y. Nov. 28, 2022), quoting In re Kassover, 343 F.3d 91, 95 (2d Cir. 2003) (Note: The author succeeded in losing the appeal in Kassover.) The court’s unremarkable findings purported to support its position: a) the preliminary injunction was not a final order; b) leave to appeal was not warranted; and c) the appellant failed to show why the “extraordinary remedy” of mandamus was warranted. But the court conceded that district courts are split on the important issue of whether bankruptcy court preliminary injunctions, admittedly interlocutory, are appealable to the district court as of right under 28 U.S.C §1292(a)(1) (courts of appeals have jurisdiction, and appellate review exists as of right over “interlocutory orders … granting [or] refusing … injunctions”). In the court’s view, 28 U.S.C. §158(a)(1) required the court to review only “final” orders and “does not mention preliminary injunctions.” Id. at *2. Besides, said the court, the bankruptcy court will eventually “revisit the merits and appropriate parameters of the Preliminary Injunction.” Id. at *3.
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Delaware District Court Could Guide Supreme Court Purdue Pharma Decision
By Michael L. Cook
A bankruptcy court properly held that derivative claims based on “piercing the corporate veil theory of liability [were] released under” a confirmed reorganization plan, but that direct “claims for negligent undertaking” were not released and “could be asserted” in state court against the debtors’ equity sponsors.
Court Caps Landlord's Bankruptcy Claim Against Lease Guarantor
By Andrew C. Kassner and Joseph N. Argentina Jr.
A big issue in real estate and retail bankruptcies, among others, involves the disposition of commercial real estate leases, given the potential magnitude of landlord damage claims under state law resulting from a tenant’s default under a long-term lease.
Delaware Bankruptcy Court Rejects Equity Holder's Challenge to Revoke Confirmation Order
By Lawrence J. Kotler
The equity owner asserted that the confirmation order previously entered by the court should be revoked based on the equity owner’s claim that value was lost due to improper sale and marketing efforts by the debtors and its professionals both pre- and post-bankruptcy and, as such, they should have been “in the money” and entitled to a distribution under the confirmed plan.
By George Williams
One of the major catalysts of the “Crypto Winter” that began in 2022 was the collapse of Terraform Labs’s native token LUNA in May 2022. Now two years and a dozen crypto-related bankruptcies later, Terraform Labs has filed for Chapter 11 protection.