On June 6, 2024, the Supreme Court issued its opinion in Truck Insurance Exchange v. Kaiser Gypsum Co., No. 22-1079, conferring broad standing to debtors’ pre-bankruptcy liability insurers to appear and be heard in Chapter 11 bankruptcy proceedings. The ruling eliminates the “insurance neutrality” doctrine that previously constrained the participation of insurers in Chapter 11, greatly expanding insurers’ capacity to influence the reorganization process.
Background: Insurer Standing in Chapter 11 Bankruptcy
Over the past few years, the senior living sector has endured some hard times. In 2023, many operators found themselves in distress and facing a sale or court-governed proceeding. Interest rates, wage inflation, staffing shortages and patient volume decline post-pandemic all impact operational risk and investment opportunities.
Introduction
Preventive measures
Out-of-court reorganisation
In-court reorganisation
Modernisation of bankruptcy
In a recent decision, Bruce v. Citigroup, Inc., et al., the United States Court of Appeals for the Second Circuit clarified the limits of bankruptcy court jurisdiction over class actions. Specifically, the court rejected a bankruptcy court’s ruling that allowed a plaintiff’s nationwide class action to survive Defendant Citibank, N.A.’s (“Citi”) motion to dismiss and strike class allegations.
On 15 November 2023, the Temporary Transparency of Expedited Liquidation Act enters into force, initially for a period of two years. Expedited liquidation (also known as 'turboliquidation') concerns the dissolution of a legal entity with no assets, at its own initiative. The temporary Act aims to increase transparency in the case of an expedited liquidation and to improve the protection of creditors.
On June 15, 2023, the U.S. Supreme Court ruled that the Bankruptcy Code barred an Indian tribe’s attempts to collect on a defaulted debt from a Chapter 13 debtor.
The Belgian legislator is preparing a legal framework on insolvency law to expand the restructuring toolbox. On 26 March 2023, a draft bill was published transposing EU Directive 2019/1023 on restructuring and insolvency. The Bill should be voted before the summer holidays. Our Restructuring & Insolvency team has identified five things you need to know about the upcoming changes.
The United States Court of Appeals for the Fifth Circuit issued a ruling on Oct. 14, 2022 regarding the treatment of make-whole premiums in bankruptcy. The court held that claims for payment of a make-whole premium are the economic equivalent of unmatured interest and therefore disallowed under section 502(b)(2) of the Bankruptcy Code — unless the “solvent debtor exception” applies.
As one of the nation’s premier bankruptcy venues, the Eastern District of Virginia (“EDVA”) has attracted some of the largest and most complex corporate bankruptcies. While companies file chapter 11 bankruptcies in the EDVA for many reasons—experienced judges, well-established legal precedent, a robust bankruptcy bar and local rules, and an expeditious docket (dubbed the “Rocket Docket”)—national law firms are also cognizant that EDVA courts have generally approved their fees, even when they exceed prevailing geographic market rates.
National Rates in the EDVA