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Avoiding Double-Dipping: U.S. Trustee Fees and Creditor Trusts
The U.S. Trustee has recently taken the position that GUC Trusts (disbursements made by creditor trusts formed under bankruptcy plans) should be required to pay fees on account of their own disbursements to creditors. The outcomes in three recent bankruptcy cases highlight different approaches to addressing the U.S. Trustee's argument: closing bankruptcy cases early, deferring the issue to a later date, or focusing on the distinction between contingent and non-contingent assets.
September 01, 2024Nicole M. Sweeney and Megan M. Wasson
The Future Viability of 105(a) Injunctions Following the Supreme Court's Decision In 'Purdue Pharma'
Until now, a successful reorganization assumed the debtor could confirm a plan with nondebtor releases and injunctions based on less than full creditor consensus. Now that nonconsensual releases in Chapter 11 plans are no longer permitted, will debtors have a more difficult time obtaining a 105(a) injunction?
August 01, 2024Theresa A. Driscoll
Appellate Courts Skeptical About Bankruptcy Court Sanctions
Recent appellate decisions reflect a distaste for appeals from bankruptcy court sanction orders. A split Fourth Circuit even refused to hear such an appeal. Other courts tend to limit sanctions or, alternatively, accept a bankruptcy judge's findings under a stringent "abuse of discretion" standard.
July 01, 2024Michael L. Cook
Courts Split Over Requirement for Chapter 15 Jurisdiction In the U.S.
If a foreign debtor doesn't reside in, have a domicile or place of business in, or have property in the U.S., can the foreign representative of the debtor utilize Chapter 15 to obtain discovery to use in the foreign proceeding?
June 01, 2024Daniel A. Lowenthal
Delaware District Court Could Guide Supreme Court Purdue Pharma Decision
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.
May 01, 2024Michael L. Cook
Seventh Circuit Applies Safe Harbor to Private Securities Transaction
"… [T]he term 'securities contract' as used in [Bankruptcy Code] §546(e) unambiguously includes contracts involving privately held securities," The Seventh Circuit held in Petr v. BMO Harris Bank, N.A.
April 01, 2024Michael L. Cook
Landmines In Bankruptcy Appellate Practice, Part III
When courts have made important exceptions in the past year, they have either added a gloss on the Judicial Code, corrected lawyers' errors, filled in statutory gaps, or clarified the relevant statutory language.
March 01, 2024Michael L. Cook
Landmines In Bankruptcy Practice, Part II
By enforcing deadlines strictly, refusing to hear appeals from interlocutory orders, and rarely bypassing the district court for direct appeals, appellate courts have generally avoided what they view as unnecessary work and delay. But a few courts have made important exceptions in the past year.
February 01, 2024Michael L. Cook
Three Things Trustees Should Know About Due Diligence in Preference Litigation
Courts have struggled with the interpretation of the 2019 amendment to Section 547, specifically whether the due diligence requirement is an element of a preference claim that must be adequately pleaded in the plaintiff's complaint. While the law is still developing, there are three important takeaways for trustees to consider.
January 01, 2024Brad Jones
Litigation Finance Offers Significant Benefits for Restructuring Matters
In today's volatile economic climate, companies need to be more creative to find ways to mitigate risk. Litigation finance is one of those out-of-the-box solutions that can provide benefits.
December 01, 2023Jeffery Lula