Are Buyers of Assets Acquired from Debtors in Section 363 Bankruptcy Sales Protected from Debtors’ Product Liability Claims?

Second Circuit Court of Appeals Decision in GM Cases Casts a Shadow Over Whether Section 363 Sale Orders Insulate Buyers from Debtors’ Product Liability Claims.

Filed under:
USA, Banking, Insolvency & Restructuring, Litigation, Paul Hastings LLP, Bankruptcy, Debtor, Liability (financial accounting), General Motors, Title 11 of the US Code
Authors:
Luc A. Despins , Chris Dickerson , Matthew M. Murphy , Leslie A. Plaskon , Andrew V. Tenzer , Marc J. Carmel
Location:
USA
Firm:
Paul Hastings LLP
Delaware Bankruptcy Court Refuses to Dismiss Chapter 11 Case Despite Existence of Secured Lender’s “Golden Share” in Debtor’s Delaware LLC Agreement: Could Bankruptcy-Remote Structures Be at Risk?

I. Introduction

Filed under:
USA, Delaware, Banking, Insolvency & Restructuring, Litigation, Paul Hastings LLP, Bankruptcy, Fiduciary, Limited liability company, United States bankruptcy court
Authors:
Luc A. Despins , Chris Dickerson , Matthew M. Murphy , Leslie A. Plaskon , Andrew V. Tenzer , Marc J. Carmel
Location:
USA
Firm:
Paul Hastings LLP
Advice for directors and officers of distressed corporations: fiduciary duties

The most recent decisions (by judges in Delaware and several other relevant jurisdictions) hold that fiduciary duties are owed to the corporation that the director and officer is serving and do not change whether the corporation is solvent, approaching insolvency (described as the “zone of insolvency”), or insolvent.

Filed under:
USA, Delaware, Insolvency & Restructuring, Litigation, Paul Hastings LLP, Fiduciary
Authors:
Marc J. Carmel , G. Alexander Bongartz , J. Mark Poerio
Location:
USA
Firm:
Paul Hastings LLP