The author examines a recent decision by the U.S. Court of Appeals for the Third Circuit that involved whether a contract was, or was not, an executory contract.

“[B]ankruptcy inevitably creates harsh results for some players,” explained the U.S. Court of Appeals for the Third Circuit on May 21, 2021, when it denied a film producer’s claim for contractual cure payments in In re Weinstein Company Holdings, LLC. 1

The Czech Ministry of Justice recently published a bill on preventive restructurings (the "Bill") implementing the directive on preventive restructuring frameworks which will introduce a brand-new legal tool preventing the insolvency of viable enterprises in temporary financial difficulties.

The Bill is now heading to the legislative process and should become effective from July 2022. Although it may still undergo some changes, it is already obvious that it will revolutionise Czech insolvency law.

Courts frequently dismiss creditor appeals of bankruptcy confirmation orders as equitably moot. However, the Eighth Circuit Court of Appeals recently departed from this historic practice. In reversing a District Court determination that confirmation of a plan rendered a creditor’s appeal equitably moot, the Eighth Circuit held that motions to dismiss for equitable mootness should be “rarely granted,” and it reversed and remanded the lower courts’ dismissal of a creditor’s appeal of a Plan Confirmation Order on equitable mootness grounds.

Editorial | Restructuring Directive  

Am 16.06.2021 wurde von der Bundesregierung der Entwurf der neuen Restrukturierungsordnung (ReO), mit der die RL (EU) 2019/1023 (RestrukturierungsRL) umgesetzt wird, beschlossen (siehe hier).

The amendment to the Business Corporations Act effective from 1 January of this year (the "Amendment") brings, among other things, a significant change in the liability of members of a statutory body, which will affect the current topic of insolvency.

Members of a statutory body may now be liable in the event of insolvency for a much wider range of misconduct than was the case until the end of 2020. And not only them. The Amendment explicitly widens the range of persons to whom the new liability rules will apply.

"`Staggering' legal fees in Boy Scouts Bankruptcy Case." So read the title of an article in The New York Times on May 11, 2021. According to the reporter, a "lawyer negotiating a resolution to the multi-billion dollar bankruptcy filed by the Boy Scouts of America billed $267,435 in a single month. Another charged $1,725 for each hour of work. New lawyers fresh out of law school have been billing at an hourly rate of more than $600." The bankruptcy judge presiding over the case has called the fee totals "staggering," said the reporter.

The Third Circuit recently held, in a case from the Energy Future Holdings bankruptcy, that a losing stalking horse bidder can provide sufficient value to the debtor’s estate to receive an administrative claim for a break-up fee and expenses. In re Energy Future Holdings Corp., 990 F.3d 728, 748 (3rd Cir. 2021). This represents an expansive view of potential administrative claims related to those costs, providing bidders significant potential protections for their bids.

“[B]ankruptcy inevitably creates harsh results for some players,” explained the U.S. Court of Appeals for the Third Circuit on May 21, 2021, when it denied a film producer’s claim for contractual cure payments. In re Weinstein Company Holdings, LLC, 2021 WL 2023058, *9 (3d Cir. May 21, 2021).

The debtors' legal malpractice claim was "not property of their bankruptcy estate," held a split Ninth Circuit on June 30, 2020. In re Glaser, 816 Fed. Appx. 103, 104 (9th Cir. June 30, 2020) (2-1). But the U.S. District Court for the District of Minnesota one week later affirmed a bankruptcy court judgment that "the [debtor's] estate was the proper owner" of such a claim. In re Bruess, 2020 WL3642324, 1 (D. Minn. July 6, 2020).