Highlights

Long-anticipated U.S. Supreme Court decision in Purdue Pharma shakes up the scope of bankruptcy releases

Insurers get increased ability to participate in bankruptcy cases

Overpayment of bankruptcy fees is not refundable to Chapter 11 debtors

Highlights

The Supreme Court held Section 363(m) is only a “statutory limitation” to accessing appellate relief in disputed bankruptcy sales that requires parties to take certain procedural steps to be effective

The Supreme Court also addressed mootness arguments and held that as long as parties have a concrete interest, however small, in the outcome of an appeal, the appeal should remain alive

The ruling provides insight as to how the Supreme Court may tackle the controversial doctrine of “equitable mootness”

Highlights

Counterparties should continue to follow their current contractual obligations

Silicon Valley Bank’s parent company bankruptcy filing will not impact contractual rights

Counterparties should be vigilant and consider alternate financing arrangements

After depositors rushed to withdraw funds from Silicon Valley Bank (SVB), on Friday, March 10, 2023, the US bank was closed by the California Department of Financial Protection and Innovation (DFPI), and the Federal Deposit Insurance Corporation (FDIC) was named receiver of the closed bank.

Since 1988, the ‘rule in West Mercia’ – so named after the West Mercia Safetywear v Dodd Court of Appeal case – has been the leading authority for when directors of financially stressed companies are subject to the so-called ‘creditor duty’, namely the duty to consider the interests of the company’s creditors.

As discussed in an earlier post called “Moving Up: Bankruptcy Code Dollar Amounts Will Increase On April 1, 2022,” various dollar amounts in the Bankruptcy Code and related statutory provisions were increased for cases filed on or after today, April 1, 2022.

An official notice from the Judicial Conference of the United States was just published announcing that certain dollar amounts in the Bankruptcy Code will be increased a larger than usual 10.973% this time for new cases filed on or after April 1, 2022.

Highlights

On Jan. 10, the U.S. Supreme Court agreed to hear three cases, which present the following three questions:

Does a motion for relief from a final judgment that is premised on a legal error fall under Rule 60(b)(1) or 60(b)(6)?

Does the Constitution's provision for “uniform” bankruptcy laws permit Congress to implement Chapter 11 fee increases in different ways in different regions of the country?

Each year amendments are made to the Federal Rules of Bankruptcy Procedure, which govern how bankruptcy cases are managed. The amendments address issues identified by an Advisory Committee made up of federal judges, bankruptcy attorneys, and others. The rule amendments are ultimately adopted by the U.S. Supreme Court and technically subject to Congressional disapproval.

After bringing dozens of criminal charges against Paycheck Protection Program loan recipients in recent months, on January 12, the US Department of Justice announced its first civil settlement resolving allegations of PPP loan fraud.