The U.S. Supreme Court has issued a long-awaited decision that many practitioners had hoped would provide insight into the permissible breadth of third-party releases and injunctions often contained in confirmed chapter 11 plans. The high court, however, narrowly resolved the issue presented in Travelers Indem. Co. v. Bailey, 129 S.Ct. 2195 (2009), and left open that ultimate question.

The U.S. Court of Appeals for the Eleventh Circuit has affirmed a lower court ruling that lease termination fees can be considered preferential transfers under the Bankruptcy Code, subject to avoidance. The court’s holding reinforces concerns over whether landlords can structure lease terminations in a manner that protects them from preference recovery.