In another decision affecting Chapter 11 cases, U.S. Bank National Association v. Village at Lakeridge, --- S. Ct. ---, 2018 WL 1143822 (2018), on March 5, 2018, the United States Supreme Court issued a unanimous decision, authored by Justice Kagan, affirming the Ninth Circuit’s decision to review the Bankruptcy Court’s determination of a mixed question of fact and law for clear error, rather than de novo.
In a much anticipated decision issued on March 22, 2017, the United States Supreme Court determined in Czyzewski v. Jevic Holding Corp. (Jevic) that a “structured dismissal” of a bankruptcy case cannot include a distribution scheme to creditors that does not comply with the priorities provided for under the Bankruptcy Code. The decision looks at the policy underlying “basic priority rules” in bankruptcy cases and, in doing so, throws into question the future use of negotiated settlements in bankruptcy cases where some, but not all, creditors receive a benefit.
On January 17, 2017, in a long-awaited decision in Marblegate Asset Management, LLC v. Education Management Finance Corp.,1 the US Court of Appeals for the Second Circuit held that Section 316 of the Trust Indenture Act ("TIA") does not prohibit an out of court restructuring of corporate bonds so long as an indenture's core payment terms are left intact.
On December 5, 2013, Judge Steven Rhodes of the US Bankruptcy Court for the Eastern District of Michigan held that the city of Detroit had satisfied the five expressly delineated eligibility requirements for filing under Chapter 9 of the US Bankruptcy Code1 and so could proceed with its bankruptcy case.
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