“2 There is one inconsequential difference — § 1228(a) refers to debt ‘of a kind specified,’ while § 1192(2) refers to debt ‘of the kind specified.’” [Fn. 1]
This “inconsequential difference” quotation, from footnote 2 in the Fourth Circuit’s Cantwell v. Clearyopinion, is on the application of § 523 discharge exceptions to corporations and LLCs. The “inconsequential difference” quote, is both:
Justice Stephen G. Breyer is now retired from the U.S. Supreme Court, serving from August 3, 1994, to June 30, 2022.
One of his legacies—and an exceedingly important one—is this: he has worked, successfully, to erase “public rights” from the lexicon of controlling bankruptcy law.
What follows is a summary of how “public rights” came to be part of that lexicon, and how Justice Breyer works to get it erased.
“PUBLIC RIGHTS” BEGINNING—Northern Pipeline
This matter involved the former director and former accountant of CGS Constructions (QLD) Pty Ltd filing proceedings seeking an injunction to restrain the Liquidators from engaging Cornwalls Lawyers to act on the basis that:
- Cornwalls also acted for a substantial creditor, Union Share Pty Ltd; and
- the Liquidators, by engaging Cornwalls, had manifested a tendency to favour certain interests at the expense of others.
Background
In the matter of Squirrel Limited (In Liquidation), the Court considered an application for summary judgement against a director for insolvent trading. In doing so, the Court considered the principles underpinning a director’s duty to prevent insolvent trading and the compensation payable as a result.
Background
In Re Intellicomms Pty Ltd (in liq) [2022] VSC 228, it was determined that a sale agreement was a creditor-defeating disposition within the meaning of section 588FDB of the Corporations Act 2001 (Cth) (Act) and voidable pursuant to section 588FE(6B) of the Act.
The case before the U.S. Supreme Court is MOAC Mall Holdings LLC v. Transform Holdco LLC, Case No. 21-1270.
The bankruptcy question upon which the U.S. Supreme Court granted certiorari is this:
Both the Johnson & Johnson and InfoWars bankruptcies are filed to address tort lawsuits.
Johnson & Johnson’s bankruptcy survives a motions to dismiss.[Fn. 1] InfoWars’ bankruptcy doesn’t.[Fn. 2]
What follows is an effort to compare and contrast the two cases, revealing why one survives and the other doesn’t.
The Businesses
–Johnson & Johnson
Is the § 363(m) limit on appeal of a sale order “subject to waiver”?
That’s the essential question before the U.S. Supreme Court in MOAC Mall Holdings LLC v. Transform Holdco LLC, Case No. 21-1270 (certiorari granted June 27, 2022).
A deep circuit split exists on whether the § 363(m) limitation is, (i) on an appellate court’s jurisdiction, or (ii) on remedies an appellate court can provide.[Fn. 1]
In large, complex bankruptcy cases:
- The mediator must have a plan;
- Otherwise, the mediator is going to get run over;
- These are tough cases with very experienced lawyers who often have significant resources to put into the fight; and
- The mediator has to be just as resourceful, just as strong, just as ready to engage as the lawyers.
That’s the view expressed by Judge Gerald Rosen (Chief Judicial Mediator in City of Detroit bankruptcy) [fn.1] in a May 2021 interview on the mediation process in the Detroit bankruptcy [fn. 2].
Congress and the President finally extend the $7.5 million debt limit for Subchapter V eligibility:
- by “unanimous consent” in the Senate;
- by a vote of 392 – 21 in the House; and
A legislative history of the new law is at this link.
The new law is bi-partisan and uncontroversial. But there are some bells and whistles, as discussed below.
“SUNSET” – Again!