On July 25, 2023, the United States Court of Appeals for the Fifth Circuit issued an important opinion protecting the rights of stalking horse bidders in Section 363 sales. In the Matter of Bouchard Transportation Company, Inc. involved one of the largest petroleum shipping companies in the United States. Bouchard sought to sell a large portion of its assets, consisting of certain vessels, through a Bankruptcy Court approved auction. In anticipation of the auction, Bouchard sought, and the Bankruptcy Court entered a bidding procedures order.

When a debtor receives a bankruptcy discharge, section 524(a) of the U.S. Bankruptcy Code prohibits a creditor from seeking to collect a prepetition debt against the discharged debtor or its property. Importantly, the discharge does not extinguish the debt—it merely limits recourse against the discharged debtor. Section 524(e), however, provides that the discharge does not affect the liability of non-debtors for the discharged debt.

Several relics of the 2008-2010 financial crisis have returned to the commercial real estate sector as distress in the market picks up and lenders and borrowers look for solutions to loans that are in or near default.

While media attention of the COVID-19 pandemic has focused on commercial tenants, many commercial landlords are also experiencing distress as a result of missed rent payments. There are a few general concepts that are helpful to understand as a tenant in the event your landlord files bankruptcy.

When debt restructuring discussions are at an impasse and the reservoir of goodwill between the parties has run dry, stakeholders face difficult choices. For a lender, one of the most powerful tools available is the exercise of rights under a voting proxy given by a parent holding company in connection with a pledge of a borrower’s stock or membership interests. Through the exercise of proxy rights, lenders may replace a borrower’s board of directors with a new board made up of independent directors.

In April, we discussed how Colorado’s state supreme court issued its highly anticipated decision confirming a borrower’s bankruptcy discharge does not accelerate secured installment debt or trigger the final statute of limitations period to recover the debt.

In a mass-tort bankruptcy, when 95% of 120,000 creditors vote to accept a mediated plan paying over $7 billion to creditors, shouldn’t the plan be confirmed?

Section 544(b)(1) of the Bankruptcy Code enables a trustee to step into the shoes of a creditor and avoid a transfer “of an interest of the debtor in property” that an unsecured creditor could avoid under applicable state law. See 11 U.S.C. § 544(b)(1). Thus, for example, if outside of bankruptcy a creditor could avoid a transaction entered by a debtor as a fraudulent transfer, in bankruptcy, the trustee acquires the power to avoid such a transaction.

In May I wrote about a manufacturer of Aqueous Film Forming Foam (AFFF) excused from the PFAS Multi-District Litigation in South Carolina because its PFAS-related liabilities might exceed its assets which is something for a Federal Bankruptcy Court to sort out.  At the time I worried that this was only one of many PFAS-related bankruptcies we would be seeing

There is longstanding controversy concerning the validity of third-party release provisions in non-asbestos trust chapter 11 plans that limit the potential exposure of various non-debtor parties involved in the process of negotiating, implementing and funding a plan. In the latest chapter of this debate, the U.S. Court of Appeals for the Second Circuit handed down a long-awaited ruling regarding the validity of nonconsensual third-party releases in the chapter 11 plan of pharmaceutical company Purdue Pharma, Inc. and its affiliated debtors (collectively, "Purdue").