Executive Summary

At stake in a recent decision by the First Circuit was this: when a bankruptcy matter is before a federal district court based on non-core, “related to” jurisdiction, should the court apply the Federal Rules of Bankruptcy Procedure or the Federal Rules of Civil Procedure? The First Circuit ruled that the former apply, and in so doing joined three other circuits that have also considered this issue. Roy v. Canadian Pac. Ry. Co.

A creditor in bankruptcy must normally file a proof of claim by a certain specified time, known as the bar date, or have its claim be barred.

Mr Justice Snowden’s recent judgment sanctioning the Virgin Active restructuring plans is significant for several reasons. Not only is it the first judgment to consider the cram down power of the 2006 Companies Act, but it is only the third instance that the cross-class cram down mechanism has been used. It is also the first time it has been used to cram down classes of dissenting landlords.

Introduction

In 2018, the liquidating trustee for Venoco, LLC and its affiliated debtors (collectively, the “Debtors”) commenced an action in the United States Bankruptcy Court for the District of Delaware seeking monetary damages from the State of California and its Lands Commission (collectively, the “State”) as compensation for the alleged taking of a refinery (the “Onshore Facility”) that belonged to the Debtors (the “Adversary Proceeding”). The State moved to dismiss, claiming, among other things, sovereign immunity.

A fundamental tenet of bankruptcy law is that a debtor will have the ability to get a fresh start once it emerges. A company’s ability to discharge liabilities is among the primary drivers for seeking protection under chapter 11 and, thus, it is of no surprise that ensuring necessary steps are taken for a successful discharge is of utmost importance. Absent a successful discharge of prepetition claims, the reorganized debtor may be saddled with additional liabilities, reducing value for plan stakeholders. The recent Third Circuit unreported decision – Sweeney v.

United States Bankruptcy Judge Harlin Hale recently dismissed the National Rifle Association’s Chapter 11 petition as not filed in good faith. The decision leaves the 150-year-old gun-rights organization susceptible to the New York Attorney General’s suit seeking to dissolve it.

In recognition of the 15th anniversary of the passage of chapter 15 of the Bankruptcy Code, the New York City Bar Association’s Bankruptcy & Corporate Reorganization Committee hosted a webinar on May 12, 2021 to discuss the current state of chapter 15 cases and potential, corresponding and significant future developments.[1]Several dozen participants joined a panel of distinguished leaders in the field: the Honorable Allan Gropper, former United

Debtors who ignore instructions from the Bankruptcy Court do so at their own peril, as a recent case from the First Circuit Court of Appeals illustrates.