On June 27, 2024, the United States Supreme Court issued its decision in Harrington v. Purdue Pharma LP, addressing the question of whether a company can use bankruptcy to resolve the liability of non-debtor third parties. The Supreme Court, in a 5-4 decision, held that the bankruptcy code does not authorize a release and an injunction that, as part of a plan of reorganization under Chapter 11, effectively seek to discharge the claims against a nondebtor without the consent of the affected claimants.
On June 27, 2024, the Supreme Court issued its opinion in Harrington v. Purdue Pharma L.P., 603 U.S. ____ (2024) holding that the Bankruptcy Code does not allow for the inclusion of non-consensual third-party releases in chapter 11 plans. This decision settles a long-standing circuit split on the propriety of such releases and clarifies that a plan may not provide for the release of claims against non-debtors without the consent of the claimants.
For most businesses, a decision to undertake an organisational change can mean a reduction in operational costs, a reduction in roles, an increase in efficiencies and streamlined decision-making. However, the announcement of a restructure can often leave staff of all levels feeling tense and uncertain. Effectively navigating organisational change is not something that happens by chance, it requires a clear plan, effective communication and a recognition of risks.
This article will help employers plan for organisational change, identify risks and manage communication.
In a proceeding brought by Mr Curran, in his capacity as the trustee for June Ellen Investment Trust (Plaintiff), to wind up Fitzgerald Housing Limited (formerly known as Kay Fitzgerald Housing Charity Limited) (Defendant), the New South Wales Supreme Court considered whether it was necessary to adjourn the winding up proceeding to allow the Defendant to advance a small business restructuring process (Restructuring).
Bankruptcy litigation can stem well beyond the primary bankruptcy proceedings. Continued litigation may be born out of disputes between bankrupts, bankruptcy trustees and other interested parties in respect of methods of asset liquidation.
In its recent German Pellets decision, the Fifth Circuit held that a creditor could not assert its indemnification defenses in a suit brought by the trustee of a liquidation trust because the Chapter 11 plan’s express language permanently enjoined the defenses and the creditor chose not to participate in the debtor’s bankruptcy despite having actual knowledge of it.
The United States Supreme Court recently accepted review of In re Kaiser Gypsum Co., Inc., 60 F.4th 73 (4th Cir.
THE BRIEF
FINANCIAL SERVICES LITIGATION QUARTERLY
FALL 2023
1
TABLE OF CONTENTS
Were There Underwriting Requirements for PPP Loans After All? The Sound-Value Requirement May Pose Risk for PPP Lenders
3
Noteworthy10
District Court Upholds New ERISA Rules on ESG Investing
10
Fourth Circuit Holds That Class-Action Waivers Must Be Addressed Before Class Certification
12
Ninth Circuit: Fees for Claims-Made Settlements Must Be Based on Actual Recovery
13
Yes is the answer! On 12 July 2023, the Parliamentary Joint Committee on Corporations and Financial Services published its report regarding corporate insolvency in Australia.
Objective of the inquiry
The committee’s inquiry assessed how effective the current corporate insolvency regime is at providing benefits to, and protecting, stakeholders as well as the Australian economy. It looked at a number of aspects including:
By an Amended Special Case, Derrington J reserved for consideration by the Full Court of the Federal Court the following question: “Is statutory set-off, under s 553C(1) of the Act, available to the [appellant] in this proceeding against the [first respondent’s] claim as liquidator for the recovery of an unfair preference under s 588FA of the Act?” By majority, the Court of Appeal (Kiefel CJ, Gordon, Edelman and Stewart JJ) held that s 553C(1) of the Act does not entitle the creditor to such a set-off.
Background