Back in December of 2017, the Bankruptcy Protector provided a succinct summary of all cases decided post-Jevic through November 17, 2017. In this update, we discuss the cases decided between November 17, 2017 and May 10, 2019.

The chart below includes the case name, date, and citation; a brief description of the nature of the case; and a brief description of how the Court applied the Jevic.

A financial crisis and situations where insolvency is imminent are not only challenging for a company and its management, but also entail significant liability risks for management in the case of subsequent insolvency proceedings. Payments made after a company has become materially insolvent (i.e. illiquid or overindebted under Austrian insolvency law), but before the 60-day deadline for filing for insolvency has expired, are risky. Which payments are allowed according to the Austrian Supreme Court?

Scope of liability

At the very end of a recent opinion, the First Circuit seemingly provided guidance on how bondholders can attack the constitutionality of Puerto Rico’s debt restricting act, PROMESA (The Puerto Rico Oversight, Management, and Economic Stability Act). However, the apparent guidance offered by the First Circuit may only be fool’s gold.

The United States Court of Appeals for the Third Circuit issued an opinion in Delaware Trust Company v. Morgan Stanley Capital Group, Inc., Wilmington Trust, N.A. (In re Energy Future Holdings Corp.) on June 19, 2019, in which it addressed distributions of assets pursuant to the waterfall provision of an intercreditor agreement in a chapter 11 reorganization.

The list of successful restructurings outside insolvency proceedings is as long as it is confidential. Every year, companies of all sizes are stabilised and sustainably restructured without the stigma of insolvency proceedings. However, until now there has been no European legal framework for pre-insolvency restructurings and only a few national laws explicitly provide for the possibility of such preventive restructurings. This will change now.

A dispute over whether the Federal Energy Regulatory Commission (“FERC”) can order one of Northern California’s largest natural gas and electric companies – Pacific Gas & Electric Company (“PG&E”) – to reject wholesale power purchase contracts (“PPCs”) will be decided by the United States Bankruptcy Court for the Northern District of California (“Bankruptcy Court”), instead of the United States District Court for the Northern District of California (“District Court”).

Law360

Reprinted with permission from Law360

In a Feb. 20, 2019, opinion in In re Titus,[1] the U.S. Court of Appeals for the Third Circuit, in an opinion authored by Judge Thomas Ambro, announced a new test for calculating damages in fraudulent transfer actions involving tenancy by the entireties transfers.

Facts

Pacific Gas and Electric Company and PG&E Corporation (together “PG&E”) filed for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Northern District of California on January 29, 2019.

The Bankruptcy Protector

On January 3rd, the United States Court of Appeals for the Tenth Circuit issued an opinion in U.S. v. Parish Chemical Company, in which it addressed the issue of equitable mootness in a non-bankruptcy appeal.

Facts of the Case

Bankruptcy Judges cannot impose additional local chapter 13 confirmation requirements beyond those created by Congress, according to the Southern District of Illinois (the “District Court”).