In an opinion that mostly flew under the radar in 2021, Judge Christopher Sontchi from the Bankruptcy Court for the District of Delaware (the “Court”) found a private equity sponsor (the “Sponsor”)¹ liable (and, in some cases, not liable) under various contractual and tort theories in connection with actions the Sponsor took or did not take in its failed efforts to stave off a potential bankruptcy filing of its portfolio company, Allied Systems Holdings, Inc., now known as ASHINC Corporation (“Allied” or the “Company

One year ago when the German out-of-court restructuring regime, StaRUG, came into force, people hoped for it to be the beginning of a new viable rescue culture in Germany.

Whilst generally not public, it appears there have been substantially more professional articles covering StaRUG than cases themselves (believed to be around 10-20 for the year).

Overview

For the second time in four weeks, a U.S. District Court has questioned the authority of bankruptcy courts to issue non-consensual third-party releases as part of a plan of reorganization. On Jan. 13, 2022, the Eastern District of Virginia vacated the confirmation order in the Mahwah Bergen Retail Group, Inc. (f/k/a Ascena Retail Group, Inc.) chapter 11 cases on the grounds that the plan contained impermissible non-consensual third-party releases. Patterson, et al. v. Mahwah Bergen Retail Group, Inc., Civ. No. 3:21cv167 (DJN) (E.D. Va. Jan. 13, 2022).

Overview

Appeals from bankruptcy court orders continue to play a key role in bankruptcy practice. The relevant sections of the Judicial Code and the Federal Bankruptcy Rules arguably cover all the relevant issues in a straightforward manner. Recent cases, however, show that neither Congress nor the Rules Committees could ever address the myriad issues raised by imaginative lawyers. The appellate courts continue to wrestle with standing, jurisdiction, mootness, excusable neglect, and finality, among other things.

Going, going, gone. Most people might associate those words with fine art, not bankruptcy. But in In re 388 Route 22 Readington Holdings, LLC, the question arose: is value reflected by an active, non-collusive auction, while not dispositive, strong evidence of fair value under section 363(b) of the Bankruptcy Code?

A “federal [fraudulent transfer claim under Bankruptcy Code § 548] is independent of [a] state-court [foreclosure] judgment,” held the U.S. Court of Appeals for the Sixth Circuit on Dec. 27, 2021. In reLowry, 2021 WL 6112972, *1 (6th Cir. Dec. 27, 2021). Reversing the lower courts’ approval of a Michigan tax foreclosure sale, the Sixth Circuit reasoned that “the amount paid on foreclosure bore no relation at all to the value of the property, thus precluding the … argument that the sale was for ‘a reasonably equivalent value’ under the rule of BFP v.

We’ve written extensively here, here, and

As cross-border restructurings proliferate, especially in the wake of the global COVID-19 pandemic, companies with global assets and operations may utilize chapter 15 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) to facilitate cooperation between U.S. and foreign bankruptcy courts and protect assets located in the U.S. One doctrine central to relief under chapter 15 is the principle of comity, which refers to the recognition one nation’s legal system accords to another nation’s judicial proceedings. In chapter 15 proceedings, U.S.