An Official Committee of Unsecured Creditors (“UCC”) often plays an active role in larger, more complex business bankruptcy cases. But what right, if any, does a UCC have to intervene in a bankruptcy adversary proceeding? The First Circuit Court of Appeals recently addressed this very issue in Assured Guaranty Corp., et al. v. The Financial Oversight and Management Board of Puerto Rico, et. al., 17-1831 (1st Cir. Sept. 22, 2017) (“Financial Oversight”) and ultimately held that a UCC does have such a right.
The Bankruptcy Protector
Chapter 11 debtors operate under various levels of uncertainty. Often a company is dependent upon others to provide financing or close transactions necessary for the company’s survival. Such was the case of Eclipse Aviation, which filed for Chapter 11 bankruptcy in November 2008, with an (apparent) agreement to sell itself to its largest shareholder.
In In re Short Bark Industries Inc., 17-11502 (Bankr. D. Del. Sept. 11, 2017), Judge Kevin Gross of the United States Bankruptcy Court for the District of Delaware read the Supreme Court’s holding in Jevic narrowly in connection with a settlement of a dispute on DIP financing.
The bankruptcy bar is abuzz following the Supreme Court’s recent decision in Czyzewski v. Jevic Holding Corp., 15-649, 2017 BL 89680, 85 U.S.L.W. 4115 (Sup. Ct. March 22, 2017), holding that bankruptcy courts may not approve structured dismissals that do not adhere to the Bankruptcy Code’s priority scheme.
Introduction
On 29 June 2017 the High Court made an order for costs against the three former directors of Custom House Capital (the “Company”) having already disqualified them from acting as directors for periods in excess of ten years. The judgment was unusual because the order for costs was not just in relation to the legal costs but also for the very significant investigative costs of the Official Liquidator.
Background
In the recent decision of Re JD (a debtor), the High Court upheld a debtor’s challenge to a lender’s decision to reject a Personal Insolvency Agreement (“PIA”) proposal.
Section 115A of the Personal Insolvency Acts 2012- 2015 (“the Acts”) provides a new mechanism by which a debtor may seek the Court’s approval of a PIA notwithstanding its rejection by creditors.
This case is particularly significant as: