In a recent opinion – In re Heritage Home Group LLC, et al., Case No. 18-11736 (KG), 2018 WL 4684802 (Bankr. D. Del. Sept. 27, 2018) – the Delaware Bankruptcy Court addressed the longstanding issue of which professional persons must be retained under section 327(a) of the Bankruptcy Code.
A fundamental tenet of chapter 11 bankruptcies is the absolute priority rule. Initially a judge-created doctrine, the absolute priority rule was partially codified in section 1129(b)(2)(B)(ii) of the Bankruptcy Code. Under section 1129, plans must be “fair and equitable” in order to be confirmed.
Background: Professionals’ Fees in Chapter 11 cases
The shipping industry was arguably one of the hardest hit by the downturn that spread around the world late last year. The severe shipping slump, evidenced by a 93.5 per cent fall in the Baltic Dry Index between the summer of 2008 and December 2008, inevitably led to insolvencies of shipping companies across the globe1. This article briefly considers the unique challenges that insolvency practitioners face when balancing insolvency procedures against the application of maritime law.