The Bottom Line:
After a plan of reorganization is confirmed by the bankruptcy court, the plan proponents often seek to consummate the confirmed plan as soon as possible by implementing a series of restructuring transactions. Meanwhile, and objecting party has the statutory right to appeal the bankruptcy court's confirmation rulings. Absent the entry of a court-ordered stay of implementation, however, the plan proponents may "win the race" and implement the transactions before the appellate court can rule on any appeals.
In his judgment handed down on 18 October1 Popplewell J took the opportunity to clarify the law
regarding payments by a company to third parties which may or may not have been suspicious and
where the company may or may not have been insolvent at the time. He looked long and hard at the
state of knowledge necessary to ground liability, at defences available to directors and whether the
court could relieve liability for innocent breaches.
The Bottom Line:
The Bottom Line:
The Bottom Line:
On September 12, 2013, in the American Airlines case, the US Court of Appeals for the Second Circuit affirmed an order of the United States Bankruptcy Court for the Southern District of New York (a) authorizing the debtor to use proceeds of postpetition financing to repay prepetition debt without payment of amake-whole amount, and (b) denying a creditor’s request for relief fromthe automatic stay.
Background Facts
The Bottom Line
The Bottom Line: