Opinion has potential implications for a broader set of parties with potential liabilities affected by a Chapter 11 process.

On March 22, 2017, the Supreme Court of the United States decided Czyzewski v. Jevic Holding Corp., 580 U.S. __ (2017), holding that a bankruptcy court may not use a structured dismissal of a chapter 11 case to approve a distribution scheme that violates the absolute priority rule. In many middle-market cases, chapter 11 debtors had used this tool to get deals done and reorganize, despite their inability to confirm a chapter 11 plan.

On January 17, 2016, the United States Court of Appeals for the Second Circuit resolved a major issue that had affected the efficacy of out-of-court restructurings involving notes issued under the Trust Indenture Act when it reversed the decision of the U.S.

In a pair of recent decisions,1two federal courts in the Southern District of New York have broadly interpreted Section 316(b) of the Trust Indenture Act (“TIA”)2to limit the ability of parties to strip guarantees from dissenti

Debt exchanges have long been utilized by distressed companies to address liquidity concerns and to take advantage of beneficial market conditions. A company saddled with burdensome debt obligations, for example, may seek to exchange existing notes for new notes with the same outstanding principal but with borrower-favorable terms, like delayed payment or extended maturation dates (a "Face Value Exchange"). Or the company might seek to exchange existing notes for new notes with a lower face amount, motivated by discounted trading values for the existing notes (a "Fair Value Exchange").

One of the primary fights underlying assumption of an unexpired lease or executory contract has long been over whether any debtor breaches under the agreement are “curable.” Before the 2005 amendments to the Bankruptcy Code, courts were split over whether historic nonmonetary breaches (such as a failure to maintain cash reserves or prescribed hours of operation) undermined a debtor’s ability to assume the lease or contract.