The Bankruptcy Protector
“I have an opening statement that I give at the beginning of every mediation, and it goes like this”:
- “I don’t have a lot of rules but I have one firm rule and that is nobody uses the ‘F’ word—“final offer.”
“And it’s very true. If I had listened to the parties in the Detroit bankruptcy when they said, ‘This is our final offer,’ and banged their laptops shut, Detroit would still be in bankruptcy. So ignore the ‘F’ word.”
In an opinion that mostly flew under the radar in 2021, Judge Christopher Sontchi from the Bankruptcy Court for the District of Delaware (the “Court”) found investment firm Yucaipa American Alliance Fund I, L.P. and Yucaipa American Alliance (Parallel) Fund I, L.P.
In an opinion that mostly flew under the radar in 2021, Judge Christopher Sontchi from the Bankruptcy Court for the District of Delaware (the “Court”) found a private equity sponsor (the “Sponsor”)1 liable (and, in some cases, not liable) under various contractual and tort theories in connection with actions the Sponsor took or did not take in its failed efforts to stave off a potential bankruptcy filing of its portfolio company, Allied Systems Holdings, Inc., now known as ASHINC Corporation (“Allied” or the “Company
We have written many times over the past few years about how the bankruptcy courts are off-limits to state-legalized cannabis businesses. This past year brought no new relief to the cannabis industry, and the doors to the bankruptcy courts remain shut. Are the other federal courts off-limits as well? A recent district court decision from the Southern District of California sheds some light on this issue, and indicates that the district courts are at least partially open to participants in legal cannabis businesses.
Factual Background
In a December 16, 2021, decision,1 Judge Colleen McMahon of the US District Court for the Southern District of New York reversed the bankruptcy court order confirming the Chapter 11 plan of Purdue Pharma, L.P.
One year ago when the German out-of-court restructuring regime, StaRUG, came into force, people hoped for it to be the beginning of a new viable rescue culture in Germany.
Whilst generally not public, it appears there have been substantially more professional articles covering StaRUG than cases themselves (believed to be around 10-20 for the year).
Every now and then, (i) something is blatantly obvious, but (ii) those in charge insist that what seems obvious is actually false. Such a disconnect breeds distrust.
That’s precisely what exists in our bankruptcy system. The U.S. Constitution requires that bankruptcy laws be “uniform . . . throughout the United States”:
There has been much discussion concerning the recent district court appellate decision in Purdue Pharma. See In re Purdue Pharma, Case No. 21 cv 7532 (Master Case), 2021 WL 5979108 (S.D.N.Y. Dec. 16, 2021). We have been tracking developments relating to Purdue Pharma and issues concerning third-party releases: Purdue Pharma: Is Protection of Third Parties by the Automatic Stay an Oxymoron?
The opinion is from In re The Diocese of Buffalo, N.Y., Case No. 20-10322, Western New York Bankruptcy Court (entered December 27, 2021, Doc. 1487).
The Diocese of Buffalo asks the Bankruptcy Court to refer its Chapter 11 case and related adversary proceedings to mandatory global mediation–it does so twice. Its first request is denied. It’s second is granted . . . but with limitations.