On December 31, 2024, the United States Court of Appeals for the Fifth Circuit issued its long awaited opinion in the disputes arising from the controversial “uptier” transaction executed by Serta Simmons Bedding, L.L.C. (“Serta”) in 2020 and the confirmation of Serta’s chapter 11 plan by the Southern District of Texas Bankruptcy Court in 2023. The Fifth Circuit reversed former Bankruptcy Judge David Jones’ summary judgment ruling that the 2020 uptier transaction was permissible under Serta’s existing credit agreements.

The Delaware Chancery Court placed Arrowood Indemnity Company in liquidation on November 8, 2023, by a liquidation order. The court found Arrowood to be insolvent by the court, and appointed a receiver to liquidate Arrowood’s assets, evaluate any claims made against Arrowood and evaluate the payment of claims made against it.

Background

In an opinion issued on August 16, 2024 (In re Robertshaw US Holding Corp., Bankr. S.D. Tex., Case No. 24-90052, Docket No.

The single proceeding model, which is a core tenet in insolvency proceedings, was recently reaffirmed in the Companies’ Creditors Arrangement Act (“CCAA”) proceedings of Bloom Lake in Re Bloom Lake, 2021 QCCS 3402.

The Nortel Networks Corporation saga was unique for the parties, the lawyers and the judges. Judge Gross of the U.S. Bankruptcy Court in Delaware and I presided over the case in a joint trial that had never occurred before³.

The Supreme Court of Canada (“SCC”) in Canada v. Canada North Group Inc., 2021 SCC 30 [Canada North] recently held that courts in proceedings under the Companies’ Creditors Arrangement Act (the “CCAA”) have the authority to rank super-priority charges ahead of the Crown’s deemed trust claim for unremitted source deductions.

Good faith, honesty, and transparency are the watchwords of Canada’s insolvency regimes. Where a debtor makes a proposal under the Bankruptcy and Insolvency Act (the “BIA”), but the Court finds that instead of acting in good faith it engaged in self-interested behavior designed to benefit other members of a corporate group, the Court will uphold the BIA’s principles and refuse to sanction the proposal.

In Coosemans Miami v. Arthur (In re Arthur), the Bankruptcy Court for the Southern District of Florida held last week that individuals in control of a PACA trust may still receive a bankruptcy discharge of debts arising from their breach of such PACA trust. A link to the opinion is here.

The Fifth Circuit recently issued an opinion that federal bankruptcy law does not prohibit a bona fide shareholder from exercising its right to vote against a bankruptcy filing notwithstanding that such shareholder was also an unsecured creditor. This represents the latest successful attempt to preclude bankruptcy through golden shares or bankruptcy blocking provisions in corporate authority documents.

On June 14, 2018, the United States Court of Appeals for the Fifth Circuit issued a revised opinion that held that Federal law does not prevent a bona fide shareholder from exercising its right to vote against a bankruptcy petition just because it is also an unsecured creditor. In re Franchise Servs. of N. Am., Inc., 891 F.3d 198, 203 (5th Cir. 2018), as revised (June 14, 2018).