On March 14, 2022, the United States Court of Appeals for the Fifth Circuit (the “Fifth Circuit”) revisited the issue of the rejection of filed-rate contracts in bankruptcy where such contracts are governed by the Federal Energy Regulatory Commission (“FERC”). The ruling marks the first time the Fifth Circuit has addressed this issue since its 2004 decision in In re Mirant Corp.¹ In Federal Energy Regulatory Commission v.

For a company with robust data protection and recovery practices, a ransomware attack may cause a few extra headaches, but it won’t wipe the company out. Companies without those protections in place, however, risk allowing ransomware to bankrupt their entire enterprise.

A recent order from the United States Bankruptcy Court for the Southern District of Texas (the “Court”) allowed a debtor to reopen a completed auction based on a significantly more attractive, but untimely, bid. The late bid was approximately three times the cash consideration of the previously declared winning bid, and also provided for the additional containment of potential environmental risks. The decision is being appealed to the United States District Court for the Southern District of Texas (the “District Court”).

Highlights

On Jan. 10, the U.S. Supreme Court agreed to hear three cases, which present the following three questions:

Does a motion for relief from a final judgment that is premised on a legal error fall under Rule 60(b)(1) or 60(b)(6)?

Does the Constitution's provision for “uniform” bankruptcy laws permit Congress to implement Chapter 11 fee increases in different ways in different regions of the country?

Judge Craig Whitley’s recent transfer of the LTL Management case will bring a high-profile "Texas Two-Step" chapter 11 bankruptcy to New Jersey, and it may open a new chapter in how courts approach the novel transaction designed to isolate and address certain mass-tort liabilities.

In a decision that will likely impact bankruptcy proceedings around the country, the Supreme Court recently denied the petition for writ of certiorari of David Hargreaves, which challenged the equitable mootness doctrine.¹ As a result, the concept of equitable mootness remains anything but moot.

Highlights

In an effort to resolve divergent court rulings, the new Consolidated Appropriations Act gives the Small Business Administration discretion to determine which small and individual debtors may obtain PPP loans in bankruptcy

The CAA allows debtors in all bankruptcy cases to automatically take up to 210 days (thereby extending the statutory period by 90 days) to choose to continue with a non-residential real property lease and provides an additional grace period on payments for small business debtors after a filing

Shortly after the passage of a bill injecting an additional $310 billion into the Small Business Administration’s Paycheck Protection Program, the SBA has issued another supplemental Interim Final Rule (IFR) providing new guidance on several issues, including eligibility for hedge funds, private equity firms and portfolio companies, and has also answered questions about businesses in bankruptcy proceedings.

Insurance rights for transferred assets or liabilities frequently are handled in one of two ways in a corporate transaction: either they are not mentioned at all, or the parties purport to transfer them without insurer consent. This is largely because insurer consent would be impractical, if not impossible, to obtain—even if one assumes it would ever be given. In either case, the rights to insurance may or may not transfer under the law governing the transaction.

On 13 June 2019, the much anticipated DIFC Insolvency Law No. 1 of 2019 and associated DIFC Insolvency Regulations 2019 (collectively the “2019 DIFC Insolvency Law”), came into full force and effect, replacing the DIFC Insolvency Law No. 3 of 2009.

By way of context, the 2019 DIFC Insolvency Law applies only to entities registered and operating within the DIFC.