Payments owed to a shareholder by a bankrupt debtor, which are not quite dividends but which certainly look a lot like dividends, should be treated like the equity interests of a shareholder and subordinated to claims by creditors of the debtor,” held the U.S. Court of Appeals for the Fifth Circuit on Sept. 3, 2019. In re Linn Energy, LLC, 2019 WL 4149481 (5th Cir. Sept. 3, 2019).

A credit-bidding lender (“Lender”) acquired a debtor’s assets “in ‘good faith’ and ‘without collusion,’ the purchase price ‘was not controlled by any agreement among potential bidders,’ and [Lender] had not ‘engaged in any conduct that would cause or permit the Purchase Agreement to be avoided or costs and damages to be imposed under section 363(n) of the Bankruptcy Code,’” held the U.S. Bankruptcy Court for the Southern District of New York on Sept. 10, 2019. In re Waypoint Leasing Holdings, Ltd., 2019 WL 4273889, *11 (Bankr. S.D.N.Y. Sept. 10, 2019).

“[A] party moving for substantive consolidation must provide notice of the motion to the creditors of a putative consolidated non-debtor,” held the U.S. Court of Appeals for the Ninth Circuit on Sept. 9, 2019. In re Mihranian, 2019 WL 4252115 (9th Cir. Sept. 9, 2019) (emphasis added).

“… [P]ayments owed to a shareholder by a bankrupt debtor, which are not quite dividends but which certainly look a lot like dividends, should be treated like the equity interests of a shareholder and subordinated to claims by creditors of the debtor,” held the U.S. Court of Appeals for the Fifth Circuit on Sept. 3, 2019. In re Linn Energy, LLC, 2019 WL 4149481 (5th Cir. Sept. 3, 2019).

Am 16. Juli 2019 ist die Richtlinie (EU) 2019/1023 über präventive Restrukturierungsrahmen in Kraft getreten. Ihre Umsetzung in das nationale Recht der Mitgliedstaaten wird von Sanierungsspezialisten vor dem Hintergrund sinkender Wachstumsprognosen und Warnungen vor einem Wirtschaftseinbruch mit Spannung erwartet.

The Third Circuit recently took a “pragmatic approach” when affirming lower court orders denying a stay of bankruptcy settlement distributions pending appeal. In re S.S. Body Armor I, Inc., 2019 WL 2588533 (3d Cir. June 25, 2019). After holding that the district court’s “stay denial order” was “final” for jurisdictional purposes, it also confirmed “the applicable standard of review” on motions for stays pending appeals.

Relevance

The Preventive Restructuring Frameworks Directive (EU) 2019/1023 is finally in force. Following its implementation into EU member states’ national law, the directive will hopefully prove an effective tool for Europe’s restructuring practitioners, just as the continent’s economic outlook darkens.

When a Chapter 11 debtor never sought “court approval to assume” an executory service contract, it “did not assume” the contract, held the U.S. District Court for the Eastern District of Virginia on June 28, 2019. In re Toys “R” Us, Inc., 2019 WL 271305, *1 (E.D. Va. June 28, 2019).

The Third Circuit recently took a “pragmatic approach” when affirming lower court orders denying a stay of bankruptcy settlement distributions pending appeal. In re S.S. Body Armor I, Inc., 2019 WL 2588533 (3d Cir. June 25, 2019). After holding that the district court’s “stay denial order” was “final” for jurisdictional purposes, it also confirmed “the applicable standard of review” on motions for stays pending appeals.

Relevance

A bankruptcy court decision recently detailed how courts applying Bankruptcy Code (“Code”) § 303(i) can sanction creditors who “abuse… the power given to [them]… to file an involuntary bankruptcy petition.” In re Anmuth Holdings LLC, 2019 WL 1421169, * 1 (Bankr. E.D.N.Y. Mar. 27, 2019).