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U.S. Supreme Court Bankruptcy Update

The U.S. Supreme Court handed down three bankruptcy rulings to finish the Term ended in July 2024. The decisions address the validity of nonconsensual third-party releases in chapter 11 plans, the standing of insurance companies to object to "insurance neutral" chapter 11 plans, and the remedy for overpayment of administrative fees in chapter 11 cases to the Office of the U.S. Trustee. We discuss each of them below.

U.S. Supreme Court Bars Nonconsensual Third-Party Releases in Chapter 11 Plans

USA, Insolvency & Restructuring, Litigation, Jones Day, Bankruptcy, Internal Revenue Service (USA), Supreme Court of the United States
"Temporary" Suspension of Bankruptcy Cases in the COVID-19 Crisis

The Situation: In the past few weeks, due to the severe impact of the COVID-19 crisis on non-essential businesses forced to close and terminate employees after filing for chapter 11 protection, bankruptcy courts have been confronted with requests by debtors to temporarily suspend their bankruptcy cases using the courts' equitable powers and a seldom-used provision of the Bankruptcy Code: 11 U.S.C. § 305(a).

USA, Insolvency & Restructuring, Litigation, Jones Day, Landlord, Coronavirus, Title 11 of the US Code
Bankrupt Tenants and Landlords' Rights to Draw Upon a Letter of Credit Obtained as Security

​When a commercial tenant goes bankrupt, the respective rights of landlords and trustees can be complex to sort out. Yet, as illustrated by recent Ontario Superior Court decision 7636156 Canada Inc. v. OMERS Realty Corporation, 2019 ONSC 6106, this determination can have important ramifications on the assets available for distribution to creditors.

Canada, Ontario, Insolvency & Restructuring, Litigation, Real Estate, Borden Ladner Gervais LLP
Judgment Creditors Beware: The Impact of Limitation Periods on Section 38 BIA Claims

On July 31, 2019, the Ontario Court of Appeal rendered its decision in Ridel v. Goldberg, clarifying the interplay of the various provisions of the Limitations Act, 2002 at play in circumstances where judgment creditors are allowed to take proceedings in their own name pursuant to an order under the Bankruptcy and Insolvency Act.

The Facts

Canada, Ontario, Insolvency & Restructuring, Litigation, Borden Ladner Gervais LLP, Bankruptcy and Insolvency Act 1985 (Canada)
Provincial Statutory Trusts in Insolvency Proceedings: The Guarantee Company of North America v. Royal Bank of Canada

In the recent landmark decision of The Guarantee Company of North America v.

Canada, Ontario, Insolvency & Restructuring, Litigation, Borden Ladner Gervais LLP, Royal Bank of Canada, Bankruptcy and Insolvency Act 1985 (Canada), Supreme Court of Canada, Court of Appeal for Ontario
Public right to full disclosure in bankruptcy extends to Rule 2019 statements

One of the hallmarks of the U.S. bankruptcy system is ready access to information concerning any entity that files for bankruptcy protection. The integrity of that system is premised upon the presumption that not only creditors and other interested parties in a bankruptcy case, but also the public at large, should have the ability to examine any document filed with the bankruptcy court.

USA, Insolvency & Restructuring, Litigation, Jones Day, Bankruptcy, Debtor, Common law