The U.S. Supreme Court does not like the Bankruptcy Code. It never has. Two examples are:

Key Points

Mass torts and resulting litigation are a reality of life in these United States.

But one of the truly shocking things about mass tort litigation, in recent times, is this:

• judicial delays override the wishes of mass tort victims for prompt payment of negotiated amounts.

A current example of such delays is the Boy Scouts confirmed bankruptcy plan.

Chronology

Here is a short Chronology of the Boy Scouts bankruptcy plan—and the lapse of more than three years since confirmation without a final resolution:

The Uniform Law Commission (“ULC”) is the same organization that brought us the Uniform Commercial Code, the Uniform Trust Code, and other “Uniform” state laws.

The ULC is now offering a Uniform Assignment for Benefit of Creditors Act (the “Uniform ABC Act”).

The new Uniform ABC Act codifies the common law of ABCs. Such common law has its foundation in the law of trusts: i.e., debtor is the trustor, assignee is the trustee, and debtor’s creditors are the beneficiaries.

The Supreme Court of New South Wales has clarified the circumstances in which a liquidator may recover deposit funds paid to a third party and the extent to which a counterparty may rely on the good-faith defence under section 588FG of the Corporations Act 2001 (Cth).

In its decision in In re Brandt, the court seems to draw a clear line: No post-petition add-ons for attorneys’ fees and costs when a secured claim arises from a judgment lien.

When state legislatures consider a legislative bill, it’s important that they hear from stakeholders who would be affected by that bill.

Important ABC Stakeholders

When faced with a legislative bill on assignment for benefit of creditors (“ABC”), its important that legislatures hear from a variety of stakeholders, including this important group:

In this issue, we spotlight the unfolding litigation between the UCC and Oaktree in TPI Composites’ ongoing bankruptcy, which appears to be headed for a settlement. This case is unusual in that the uptier transformed former equity holders into senior creditors rather than elevating existing lenders.

The Unsecured Creditors Committee Challenge

Recently, the U.S. Supreme Court denied certiorari in two cases involving bankruptcy questions: