In an opinion issued on Sept. 20 by the United States Bankruptcy Court for the District of New Mexico, Judge David T. Thuma held that the Rooker-Feldman doctrine does not prevent a bankruptcy court from determining whether the automatic stay applies to pending state court litigation. See In re Shook, Case No. 24-10724-t7 (Bankr. N.M. Sept. 20, 2024) [ECF No. 54].

Plusieurs décisions judiciaires notables et mises à jour législatives importantes pour les prêteurs commerciaux, les entreprises et les professionnels de l’insolvabilité ont marqué l’année 2023. Le présent bulletin résume les principaux développements survenus en 2023 et met en lumière les points saillants à connaître en 2024.

1. Régime de priorité

En 2023, plusieurs affaires et mises à jour législatives ont soulevé des questions importantes concernant le régime de priorité dans le cadre des procédures d’insolvabilité.

Several significant judicial decisions and legislative updates occurred in 2023 that are relevant to commercial lenders, businesses and restructuring professionals. This bulletin summarizes the key developments of 2023 and highlights areas of significance to be aware of in 2024.

1. Priority Scheme

In 2023, several cases and legislative updates raised important questions regarding the priority scheme in insolvency proceedings.

Environmental Priorities

Dans le contexte en constante évolution des lois canadiennes en matière d’insolvabilité, le regroupement de patrimoines se révèle comme un recours puissant. Bien qu’il soit rarement utilisé, il est susceptible d’entraîner des répercussions importantes pour les entités débitrices visées et leurs créanciers. C’est d’ailleurs ce que souligne une décision récente de la Cour d’appel du Manitoba, laquelle met en avant cet élément complexe, mais crucial, du droit de l’insolvabilité.

REGROUPEMENT DE PATRIMOINES

In the ever-changing landscape of Canadian insolvency law, substantive consolidation emerges as a powerful yet rare remedy with substantial implications for debtor entities and their creditors, as highlighted by a recent decision from the Manitoba Court of Appeal, which sheds light on a complex yet crucial aspect of insolvency law.

SUBSTANTIVE CONSOLIDATION

In Matter of Imperial Petroleum Recovery Corp., 84 F.4th 264 (5th Cir. 2023), the Fifth Circuit was asked to address whether 28 U.S.C. § 1961(a) – the federal statute providing for post-judgment interest – applies in adversary proceedings even though 28 U.S.C. § 1961(a) doesn’t explicitly refer to bankruptcy courts.

In earlier posts, the Red Zone has discussed the Supreme Court’s ruling in Siegel v. Fitzgerald, 142 S. Ct. 1770 (2022), which held that increased U.S.

In Matter of Texxon Petrochemicals, L.L.C., 67 F.4th 259 (5th Cir. 2023), the Fifth Circuit held that even if an appeal is equitably moot, the appellate court nonetheless has appellate jurisdiction to consider the merits of the appeal, without reaching the issue of equitable mootness.

Section 503(b)(9) Overview

On April 17, 2023, the Fifth Circuit Court of Appeals, in Matter of RE Palm Springs II, L.L.C., 2023 WL 2966520 (5th Cir. April 17, 2023), held that a senior lender who uses economic leverage and asserts its legal rights to squeeze out a junior lender remains a good faith purchaser entitled to declare an appeal moot based on a sale under section 363(m) of the Bankruptcy Code. Key to the Fifth Circuit’s opinion was the fact that the actions in question were disclosed to the bankruptcy court in advance of it making the section 363(m) finding.

Facts