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Courts Begin to Wrestle with the Impact of City of Chicago, Illinois v. Fulton on a Debtor’s Ability to Recover Estate Property

Courts Begin to Wrestle with the Impact of on a Debtor’s Ability to Recover Estate Property

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Supreme Court of the United States
ASHINC or Swim Case Study: Lessons for Private Equity Sponsors on Risks Relating to Distressed Portfolio Companies (Part I: Continuous Contractual Breach Under a Loan Agreement)

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.

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Private equity, Fourth Amendment
No Time Runs against the King (IRS): The Golden Creditor Rule and its Discontents

Executive Summary

USA, Insolvency & Restructuring, Litigation, Tax, Weil Gotshal & Manges LLP, Internal Revenue Service (USA), Internal Revenue Code (USA), Supreme Court of the United States
What’s Done is Done: Third Circuit Upholds Equitable Mootness and Rules Out Possibility of Individualized Relief for Timely Objecting Party

Bankruptcy courts often dismiss appeals of chapter 11 plans when granting the relief requested in the appeal would undermine the finality and reliability of the corresponding plans, a doctrine known as Equitable Mootness. Over the past several years, certain circuits criticized the doctrine for its lack of statutory basis and effect of avoiding review on the merits.1

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP
Supreme Court Holds That a Non-Debtor Retaining a Debtor’s Property Does Not Exercise Control Over the Property in Violation of the Automatic Stay

In January 2020, we analyzed a split among the Circuit Courts regarding whether a non-debtor holding a debtor’s property on the petition date has an affirmative obligation under section 362(a)(3) of the Bankruptcy Code to return that property to the debtor immediately following the filing of the bankruptcy petition.

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP
Law of the Case Doctrine in Bankruptcy

When a court reaches a decision in a case, the law of the case doctrine generally provides that parties should not be able to relitigate the same issue in that case, and for the court to adhere to its prior decision.1 The doctrine does not, however, apply to every decision a court reaches. Two recent decisions by Judge Elizabeth Stong in the Brizinova chapter 7 cases in the Bankruptcy Court for the Eastern District of New York explore when the doctrine may or may not apply in bankruptcy cases.

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, United States bankruptcy court
A Momentous Rejection: United States Supreme Court Declines to Review Second Circuit’s Momentive Make-Whole Opinion

The United States Supreme Court recently declined to review the United States Court of Appeals for the Second Circuit’s opinion in Momentive Performance Materials Inc. v. BOKF, NA. BOKF and Wilmington Trust, indenture trustees for Momentive’s First Lien Notes and 1.5 Lien Notes (which we’ll refer to as the “Senior Notes”) respectively, each submitted certiorari petitions after the Second Circuit held that they were not entitled to receive make-whole premiums following Momentive’s bankruptcy.

What Is a Make-Whole?

USA, Insolvency & Restructuring, Litigation, Weil Gotshal & Manges LLP, Supreme Court of the United States