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Attention Buyers of Assets in Bankruptcy: How To Be A Good Faith Purchaser and Ensure Any Post-Closing Challenges Will Be Dismissed as Statutorily Moot Under Section 363(m) of the Bankruptcy Code

Introduction

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP
Warning to Directors of Selling Companies: Breach of Fiduciary Duty Liability May Exist for Failure to Investigate and Ensure Solvency of Company Post-Closing and Propriety and Effect of All Related Transactions (But You Can Protect Yourself)

A recent ruling from the United States District Court for the Southern District of New York sent shock waves through the legal and financial community, with some shouting that this “could be a gamestopper for the private equity business.”1 Although the ruling in In re Nine West LBO Securities Litigation2 breaks new ground and arguably narrows the protections available to directors under the normally-broad business judgment rule, there are clear lessons others can take from this saga to prevent a similar fate.

USA, Company & Commercial, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Private equity, Due diligence
Yeah, We Can Take It - Texas Bankruptcy Court Defines the Scope of Its Post-Confirmation Jurisdiction

Executive Summary

A recent decision from the United States Bankruptcy Court for the Northern District of Texas, In re Care Ctrs., LLC, No. 18-33967, 2020 Bankr. LEXIS 3205 (Bankr. N.D. Tex. Nov. 12, 2020), examined (1) the scope of bankruptcy court subject-matter jurisdiction for post-confirmation actions filed in state court and removed to bankruptcy court; and (2) when the court must or should abstain and remand a proceeding back to the court where the action was originally brought.

USA, Texas, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP
Eastern District of Virginia Bankruptcy Court Finds Landlord’s Lender Has No Right to Enforce Landlord’s Lease with Bankrupt Retailer

OVERVIEW

USA, Insolvency & Restructuring, Litigation, Real Estate, Weil Gotshal & Manges LLP, Coronavirus
Virgin Australia Group administrators’ Lien: The key to super priority

Background

Australia, Insolvency & Restructuring, Litigation, King & Wood Mallesons, Coronavirus, Virgin Group
Virgin v Wells Fargo: the Full Federal Court adopts a different interpretation of an insolvency administrator’s obligation to “give possession” under the Cape Town Convention

Following our previous alert here on Justice Middleton’s decision in Wells Fargo Trust Company, National Association (trustee) v VB Leaseco Pty Ltd (Administrators Appointed),[1] the administra

Australia, Insolvency & Restructuring, Litigation, King & Wood Mallesons, Virgin Group, Federal Court of Australia
Third Circuit Decision Provides New Guidance on the Unfair Discrimination Standard of Cramdown and the Enforcement of Subordination Agreements When Confirming Cramdown Plans

In an important decision issued at the end of August, the United States Court of Appeals for the Third Circuit, in In re Tribune Co., Case No. 18-2909 (3d Cir. Aug. 26, 2020), held that subordination agreements need not be strictly enforced when confirming a chapter 11 plan pursuant to the Bankruptcy Code’s cramdown provision in section 1129(b)(1). In its decision, the Third Circuit also encouraged bankruptcy courts to apply “a more flexible unfair-discrimination standard” and set forth eight guiding principles to aid in that effort.

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Title 11 of the US Code
Wells Fargo v Virgin: the first clarification on an insolvency administrator’s obligation to “give possession” under the Cape Town Convention

On 14 May 2015, Australia acceded to the Convention on International Interests in Mobile Equipment (“Cape Town Convention”) and the Protocol to the Cape Town Convention (“Cape Town Protocol”). In particular, for insolvency related proceedings, Australia adopted what is known as “Alternative A” in aviation industry speak. The Cape Town Convention became effective as Australian law on 1 September 2015 and applies to the relevant aviation leasing and financing transitions entered into after that date.

Australia, Insolvency & Restructuring, Litigation, King & Wood Mallesons, Virgin Group
Fraudulent Transfer Claims Avoid State Sovereign Immunity, But Only If a Property Interest Exists Under State Law

In a recent decision, In re Philadelphia Entertainment and Development Partners, L.P., No. 14-000255-mdc (Bankr. E.D. Pa. Dec. 31, 2019), the Bankruptcy Court for the Eastern District of Pennsylvania held that state sovereign immunity does not prevent bankruptcy courts from hearing fraudulent transfer claims against states.

USA, Pennsylvania, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Debtor
Covenant of Good Faith and Fair Dealing Examined: La Paloma

On January 13, 2020, the United States Bankruptcy Court for the District of Delaware issued an opinion in In re La Paloma Generating Company, LLC., Case No. 16-12700 [Adv. Pro.

USA, Delaware, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Debtor, United States bankruptcy court