The Fifth Circuit recently addressed a new fact pattern and issue concerning the Barton doctrine: whether a receiver appointed in a state court action could be sued in a subsequent bankruptcy case of the debtor absent court permission.
The U.S. District Court for the Southern District of New York affirmed a decision by the U.S. Bankruptcy Court for the Southern District of New York converting a debtor’s Subchapter V case to a Chapter 7 case. In particular, the district court found that the bankruptcy court’s decision to convert was not an abuse of discretion, especially in light of the serious conflicts of interest that existed between the debtor and the potential target of significant fraudulent transfer claims held by the debtor’s estate.
A ruling by a federal bankruptcy judge in New York denying attorney’s fees to a debtor’s counsel sends a startling reminder to attorneys and clients alike. The Chapter 11 process is not intended to be a safe harbor for a debtor solely to delay creditors or circumvent other legal proceedings.
The bankruptcy bar and courts are attempting to determine the breadth and depth of the Purdue ruling both as to what constitutes consent under a plan of reorganization and whether Purdue applies to other bankruptcy proceedings, including a sale of assets under section 363 of the Bankruptcy Code, free and clear of claims, and approval of settlements. The U.S. Bankruptcy Court for the Eastern District of Virginia recently faced these issues.
Perhaps the debate over whether multidistrict litigation or bankruptcy is a better vehicle to resolve mass torts need not be binary. Bankruptcy experts recently discussed the increasingly busy intersection of mass torts and bankruptcy as part of a discussion sponsored by the UC Berkeley School of Law ’s Civil Justice Research Initiative.
How to harmonize a debtor’s right to file against a creditor’s desire to protect its financial interests in that debtor has sparked a number of different judicial opinions.
There are some indications that parties may in fact be using the threat of an examiner and its associated costs and complications as a source of leverage, although the jury is still out on the full impact of the FTX decision on examiner motion practice.
For more than six years there has been an ongoing debate regarding the enforceability of governance restrictions, whether blocking rights, golden shares and other provisions designed to manage access to bankruptcy relief. This year, another governance restriction was upheld in dismissing a bankruptcy filing by a debtor that failed to obtain the consent of the lender-approved independent manager as required by its LLC agreement.
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A critical trial in Johnson & Johnson’s talcum powder bankruptcy began on February 18, with several lawyers arguing to dismiss the Chapter 11 case and reject the $10 billion plan.
