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Third Circuit Rules on Allowance of Make-Whole Fees and Post-Petition Interest in Solvent-Debtor Cases in In re The Hertz Corp.

On September 10, 2024, the U.S. Court of Appeals for the Third Circuit issued its opinion in Wells Fargo Bank, N.A. v. The Hertz Corp. (In re The Hertz Corp.), Case No. 23-1169, 2024 WL 4132132 (3d Cir. Sept.

USA, Insolvency & Restructuring, Litigation, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Coronavirus, Third Circuit, US Court of Appeals
New York Bankruptcy Court: Lockup Provision in Proposed Settlement Agreement Violated Bankruptcy Code's Disclosure and Solicitation Requirements

A bedrock principle underlying chapter 11 of the Bankruptcy Code is that creditors, shareholders, and other stakeholders should be provided with adequate information to make an informed decision to either accept or reject a chapter 11 plan. For this reason, the Bankruptcy Code provides that any "solicitation" of votes for or against a plan must be preceded or accompanied by stakeholders' receipt of a "disclosure statement" approved by the bankruptcy court explaining the background of the case as well as the key provisions of the chapter 11 plan.

USA, New York, Insolvency & Restructuring, Litigation, Jones Day, Bankruptcy
Restructuring Department Bulletin - May 2024

Alice Eaton Featured at Wharton’s PE and Venture Capital Conference

Restructuring partner Alice Eaton spoke on the panel “Adjusting to a New Era: Redefining Value Creation in Uncertain Times,” as part of the Wharton School of the University of Pennsylvania’s 2024 Private Equity and Venture Capital Conference on March 29. The panel covered the use of innovative financing instruments and structures for investments in distressed assets.

Elizabeth McColm Discusses Women in Restructuring at Winter Bankruptcy Conference

USA, Insolvency & Restructuring, Litigation, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Private equity, Venture capital, US Congress
Judge Glenn Rules Lockup Provisions Are Unenforceable When Counterparties Lack Adequate Information and “Meaningful Outs”

On April 22, 2024, in the chapter 11 cases of GOL Linhas Aéreas Inteligentes S.A.

USA, Insolvency & Restructuring, Litigation, Paul, Weiss, Rifkind, Wharton & Garrison LLP
U.S. Supreme Court Rules Appellate Protection of Bankruptcy Property Sale Is Subject to Waiver and Estoppel

In Short

The Situation: The U.S. Supreme Court considered whether § 363(m) of the Bankruptcy Code, which limits a party's ability to undo an asset transfer made to a good-faith purchaser in a bankruptcy case, is jurisdictional.

USA, Insolvency & Restructuring, Litigation, Jones Day, US Congress, Supreme Court of the United States
Supreme Court Holds That Section 363(m) Of The Bankruptcy Code Is Not Jurisdictional

On April 19, 2023, the U.S. Supreme Court unanimously held in MOAC Mall Holdings LLC v. Transform Holdco LLC that Section 363(m) of the Bankruptcy Code is not jurisdictional. The decision requires parties timely to invoke that provision, or else risk forfeiting its protections. The decision also continues the Supreme Court’s trend of interpreting statutes to be non-jurisdictional (and thus waivable or forfeitable) in the absence of a clear congressional statement to the contrary.

Background

USA, Insolvency & Restructuring, Litigation, Paul, Weiss, Rifkind, Wharton & Garrison LLP, US Congress, Supreme Court of the United States
Default Under Assumed Lease Need Not Be Material or Ongoing to Trigger Landlord's Entitlement to Adequate Assurance of Future Performance

The ability of a bankruptcy trustee or chapter 11 debtor-in-possession ("DIP") to assume, assume and assign, or reject executory contracts and unexpired leases is an important tool designed to promote a "fresh start" for debtors and to maximize the value of the bankruptcy estate for the benefit of all stakeholders. However, the Bankruptcy Code establishes strict requirements for the assumption or assignment of contracts and leases.

USA, Insolvency & Restructuring, Litigation, Real Estate, Jones Day
In Brief: U.S. Supreme Court Declines Review of High-Profile Bankruptcy Rulings

Madoff

USA, Insolvency & Restructuring, Litigation, Jones Day, Supreme Court of the United States, Second Circuit
U.S. Supreme Court Declines Review of Landmark Tribune Safe Harbor Ruling

On April 19, 2021, the U.S. Supreme Court declined to hear the appeal of a landmark 2019 decision issued by the U.S. Court of Appeals for the Second Circuit regarding the applicability of the Bankruptcy Code's safe harbor for certain securities, commodity, or forward contract payments to prevent the avoidance in bankruptcy of $8.3 billion in payments made to the shareholders of Tribune Co. as part of its 2007 leveraged buyout ("LBO").

USA, Derivatives, Insolvency & Restructuring, Litigation, Jones Day, Safe harbor (law), Supreme Court of the United States, Second Circuit
Supreme Court Declines to Review Second Circuit’s Tribune Decision, Leaving Intact Tribune’s Safe Harbor Defense to Clawback Actions

On April 19, 2021, the United States Supreme Court denied a petition for certiorari from the Second Circuit’s decision in In re Tribune Company Fraudulent Conveyance Litigation (“Tribune II”),[1] leaving intact the Second Circuit’s decision upholding the safe harbor defense to avoidance actions und

USA, Insolvency & Restructuring, Litigation, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Supreme Court of the United States