District Court Confirms Bankruptcy Court’s Constitutional Authority to Approve Millennium Plan Releases, Dismisses as Equitably Moot Opt-Out Lenders' Remaining Issues on Appeal

A draft government ordinance amending the Romanian insolvency law was published on September 12. The bill is intended to increase recoverability of state receivables from insolvent companies and to reduce the debtor’s control over the proceedings.

One of the main changes relates to denying the existing right of the insolvent debtor to nominate an insolvency practitioner to be appointed as official receiver. Under the current procedure, it was mandatory for the insolvency court to follow debtor’s proposal, if the creditors did not make a proposal of their own.

In Mission Product Holdings Inc. v. Old Cold LLC (In re Old Cold LLC), 879 F.3d 376 (1st Cir. 2018), the First Circuit held that a sale in possible violation of the Supreme Court’s Jevic decision does not allow an appellate court to examine the merits of the sale when the sale-approval order otherwise is statutorily moot under section 363(m).

Delaware District Judge Leonard P. Stark has seemingly split with the Second Circuit and held that the safe harbor in Section 546(e) of the Bankruptcy Code does not bar fraudulent transfer claims brought on behalf of creditors under state law, ratifying a June 2016 opinion from Delaware Bankruptcy Judge Kevin Gross.

The Bankruptcy Protector

Back in September, the Bankruptcy Protector announced that was introducing a new periodic series: theJevic Files. As promised, we have published intermittent updates identifying cases where Jevic priority skipping issues are raised and adjudicated.

In this post, we attempt to provide a succinct summary of all cases decided post-Jevic.

How Courts Are Applying Jevic

If, like me, you have ever scratched your head in confusion while preparing your taxes and thought to yourself – “I can’t believe the IRS takes such an absurd position on xyz tax exemption I want to use – who comes up with these crazy positions?” – then you might take some pleasure in a recent opinion from Judge Gross of the United States Bankruptcy Court for the District of Delaware calling an argument made by the IRS “strained and a bit confusing.” You read that right.

The U.S. Supreme Court will hear oral argument today inU.S. Bank National Association v. Village at Lakeridge (15-1509). At issue in the case is whether the appropriate standard of review for determining non-statutory insider status is the de novo standard of review applied by the U.S. Courts of Appeals for the 3rd, 7th and 10th Circuits, or the clearly erroneous standard of review adopted for the first time by the U.S. Court of Appeals for the 9th Circuit in Village at Lake Ridge.

In In re Short Bark Industries Inc., 17-11502 (Bankr. D. Del. Sept. 11, 2017), Judge Kevin Gross of the United States Bankruptcy Court for the District of Delaware read the Supreme Court’s holding in Jevic narrowly in connection with a settlement of a dispute on DIP financing.