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U.S. Supreme Court: Debtors’ Insurance Company Has Standing to Be Heard in Chapter 11 Proceeding

The U.S. Supreme Court held last week in Truck Insurance Exchange v. Kaiser Gypsum Co. that an insurance company with financial responsibility for bankruptcy claims is a “party in interest” with the right to object to a Chapter 11 reorganization plan.

Section 1109(b) of the Bankruptcy Code provides:

USA, Insolvency & Restructuring, Litigation, Frost Brown Todd LLP, Bankruptcy, Supreme Court of the United States, Fourth Circuit
In re Purdue Pharma L.P.: Second Circuit Reverses S.D.N.Y and Holds Bankruptcy Court Has Subject Matter Jurisdiction and Statutory Authority to Approve Sackler Family Releases

On May 30, 2023, the United States Court of Appeals for the Second Circuit (the “Second Circuit” or the “Court”) rendered a much anticipated opinion (the “Opinion”),1 reversing the order of the United States District Court for the Southern District of New York (the “District Court”) that the Bankruptcy Code does not permit non-consensual third-party releases of direct claims and affirming the order of the United States Bankruptcy Court for the Southern District of New York (the

USA, Company & Commercial, Insolvency & Restructuring, Litigation, Vinson & Elkins LLP, Supreme Court of the United States, Second Circuit, United States bankruptcy court, US District Court for the Southern District of New York
Toolbox for Managing Your Financially Troubled Customers

This article originally appeared in Vol. 52 of Kentucky Trucker, a publication of the Kentucky Trucking Association.

USA, Company & Commercial, Insolvency & Restructuring, Frost Brown Todd LLP
In re Boy Scouts of America and Delaware BSA, LLC: Delaware District Court Affirms Bankruptcy Court’s Approval of Third-Party Releases, in Conflict with Southern District of New York District Court in Purdue

On March 28, 2023, the United States District Court for the District of Delaware (the “District Court”) rendered an opinion (the “Opinion”)1 affirming the confirmation order of Laurie S.

USA, Delaware, Company & Commercial, Insolvency & Restructuring, Litigation, Vinson & Elkins LLP, United States bankruptcy court, US District Court for District of Delaware
Supreme Court Pokes a Hole in the Ironclad Nature of Bankruptcy 363 Sales

Purchasers often relish the prospect of buying distressed assets in a bankruptcy proceeding. Under section 363 of the Bankruptcy Code, a buyer may obtain ownership of bankruptcy estate assets “free and clear of any interest” (assuming certain conditions are met), and also be reasonably confident that the sale will not be reversed on appeal. But the U.S. Supreme Court may have now tempered that confidence. In its recent, unanimous opinion, MOAC Mall Holdings LLC v. Transform Holdco LLC, No. 21-1270 (Apr.

USA, Insolvency & Restructuring, Litigation, Frost Brown Todd LLP, US Congress, Supreme Court of the United States
Electricity as ‘Good’ or a ‘Service’ Under Section 503(b)(9)

This article was originally published in Bloomberg Law Professional Perspectives.

USA, Insolvency & Restructuring, Litigation, Frost Brown Todd LLP, Uniform Commercial Code (USA)
Silicon Valley Bank Parent Company Files for Bankruptcy

SVB Financial Group, the corporate parent of Silicon Valley Bank, filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of New York on March 17. According to a press release issued by SVB Financial Group, its related entities SVB Securities and SVB Capital are not included in the Chapter 11 filing. This bankruptcy filing comes a week after regulators took control of the failed Silicon Valley Bank.

USA, Company & Commercial, Insolvency & Restructuring, Frost Brown Todd LLP, Silicon Valley Bank
CFIUS Takes Notice of Crypto Company Bankruptcy Sale, Signaling Heightened CFIUS Attention to Bankruptcy-Related Transactions

In a provocative demonstration that it scrutinizes all types of transactions, no matter their origin, the Committee on Foreign Investment in the United States (“CFIUS”) has reportedly been vetting the proposed $1 billion sale of bankrupt crypto lender Voyager Digital’s assets to Binance.US. Voyager Digital filed for Chapter 11 bankruptcy in July 2022, and, after an initial agreement to sell its assets to FTX crumbled, Binance.US provided Voyager Digital with the winning offer for its assets in December 2022. But, after the sale’s announcement on December 30, 2022, the U.S.

USA, Banking, Corporate Finance/M&A, Insolvency & Restructuring, IT & Data Protection, Vinson & Elkins LLP, Bankruptcy, Cryptocurrency, Anti-money laundering, US Department of Justice, Committee on Foreign Investment in the United States, FTX
Sanofi v. Mallinckrodt: Delaware Decision Highlights Importance of Asset Sale Structures in Later Bankruptcy Proceedings

In Sanofi-Aventis U.S. LLC v. Mallinckrodt PLC,1 the United States District Court for the District of Delaware ruled that a debtor that purchased intellectual property under a prepetition asset purchase agreement could continue to retain and use the property post-confirmation while discharging its obligations to pay any future royalties otherwise owed. The decision highlights the importance of structuring transactions up-front to minimize the consequences of future bankruptcies.

Background

USA, Insolvency & Restructuring, Litigation, Vinson & Elkins LLP, United States bankruptcy court, US District Court for District of Delaware
Second Circuit Determines Agent’s Mistaken Payment of Principal to Lenders Does Not Invoke “Discharge-For-Value” Exception to Restitution

On September 8, 2022, a three-judge panel in the United States Court of Appeals for the Second Circuit (the “Second Circuit”) reversed the United States District Court for the Southern District of New York (the “District Court”) when it determined that lenders of a syndicated loan facility to Revlon, Inc.

USA, New York, Banking, Insolvency & Restructuring, Litigation, Vinson & Elkins LLP, Second Circuit, United States bankruptcy court, US District Court for the Southern District of New York