The U.S. Court of Appeals for the Third Circuit recently confirmed that bankruptcy plans need not always recognize subordination agreements among creditors.

This two-part blog series discusses why buyers looking to make strategic purchases in the health care industry might want to take advantage of the Bankruptcy Code Section 363 sale process (363 Sale) and the pros and cons of buying assets out of bankruptcy through a 363 Sale.

Introduction and points for consideration by trustees

Summary

The Corporate Insolvency and Governance Bill (the Bill) has completed all of its stages in the House of Commons, without material amendment to the Bill as originally drafted. All three readings in the House of Lords are scheduled to take place in June 2020, and expectations are that the Bill will receive Royal Assent, and will be enacted, very shortly thereafter.

Businesses in a wide range of industries may now be forced to consider bankruptcy given the unprecedented economic challenges caused by the COVID-19 pandemic. This advisory is designed to provide a high-level view of issues to be considered by human resources when considering filing for Chapter 11 bankruptcy. Please note that this advisory focuses specifically on a Chapter 11 bankruptcy (pursuant to which a business will be reorganized) rather than Chapter 7 bankruptcy (pursuant to which a business will be liquidated).

Leveraged loans continue to be a topic of interest in the current environment, particularly when they are pooled and securitized as collateralized loan obligations. A recent decision sheds light on whether and when leveraged loans and similar instruments may be classified as securities and, therefore, be subject to securities laws.

As the COVID-19 pandemic continues to disrupt businesses and markets, and companies begin to look to bankruptcy courts for relief from the resulting liquidity and operational distress, the issue of creditor and shareholder “blocking rights” seems likely to become an important topic as parties attempt to protect their investments.

On May 1, 2020, in connection with the bankruptcy sale of Dean Foods Company (“Dean Foods”), the Department of Justice Antitrust Division required divestiture of certain Dean Foods assets by Dairy Farmers of America Inc. (“DFA”). DFA and Prairie Farms Dairy Inc. (“Prairie Farms”) were acquiring fluid milk processing plants from Dean Foods.

With courts and government agencies around the world enacting emergency measures in response to the Covid-19 pandemic – ranging from complete shutdowns to delays and limitations – advancing the ball in dispute resolution is more challenging than ever. Because fraud investigations and complex asset recovery matters are typically managed by litigation counsel and often follow litigated claims, clients have a tendency to see the effort through a litigation lens.