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The Third Circuit Court of Appeals affirms structured dismissal of Chapter 11 case, holding that a structured dismissal can deviate from the Bankruptcy Code’s priority scheme in rare circumstances

On May 21, 2015, the United States Court of Appeals for the Third Circuit affirmed a decision of the United States Bankruptcy Court for the District of Delaware, which had approved the structured dismissal of the Chapter 11 cases of Jevic Holding Corp., et al. The Court of Appeals first held that structured dismissals are not prohibited by the Bankruptcy Code, and then upheld the structured dismissal in the Jevic case, despite the fact that the settlement embodied in the structured dismissal order deviated from the Bankruptcy Code’s priority scheme.

USA, Insolvency & Restructuring, Litigation, A&O Shearman, Leveraged buyout, United States bankruptcy court, Third Circuit, US District Court for District of Delaware
The United States District Court for the Southern District of New York upholds rulings with respect to subordination, cramdown and the make-whole dispute

In a memorandum decision dated May 4, 2015, Judge Vincent L. Briccetti of the United States District Court for the Southern District of New York affirmed the September 2014 decision of Judge Robert D. Drain of the United States Bankruptcy Court for the Southern District of New York, confirming the joint plans of reorganization (the “Plan”) in the Chapter 11 cases of MPM Silicones LLC and its affiliates (“Momentive”). Appeals were taken on three separate parts of Judge Drain’s confirmation decision, each of which ultimately was affirmed by the district court:

USA, New York, Insolvency & Restructuring, Litigation, A&O Shearman
Southern District of New York holds in Madoff that the Bankruptcy Code cannot be used to recover extraterritorial transfers

Dealing a major blow to the trustee’s efforts to recover fraudulent transfers on behalf of the bankruptcy estate of the company run by Bernard Madoff, Judge Jed S. Rakoff of the United States District Court for the Southern District of New York held in SIPC v. Bernard L. Madoff Investment Securities LLC1 that the Bankruptcy Code cannot be used to recover fraudulent transfers of funds that occur entirely outside the United States.

USA, New York, Capital Markets, Insolvency & Restructuring, Litigation, White Collar Crime, A&O Shearman, Extraterritoriality, Title 11 of the US Code
Pay to play

Thanks to a decision of the Supreme Court of British Columbia released on June 13, 2013, Court-appointed receivers can now accept appointments with greater confidence that their fees and expenses incurred in passing their accounts are recoverable from the estate - or possibly from a third party who raises opposition, if no assets remain in the estate.

In Re Avant Enterprises Inc.[1], the Supreme Court of British Columbia expressed its reluctance to leave its receiver exposed in respect of costs incurred in the passing of its accounts.

Canada, British Columbia, Insolvency & Restructuring, Litigation, Fasken