When a company is not likely to survive a restructuring, its assets may have value to a third-party buyer. Absent legal protection, a buyer of a financially distressed business will usually be concerned that the company’s creditors could pursue the acquired business on various legal theories, including “successor liability,” and on that basis may decline to purchase assets of such a business.
Section 363(m) of the Bankruptcy Code is one of the most important and well-known statutes to bankruptcy practitioners. This section of the Bankruptcy Code protects a good faith asset purchaser who purchases assets from a debtor’s bankruptcy estate from having the sale unwound when the sale (or an aspect of the sale) is challenged by an appeal.
In August 1992, the largest indoor shopping mall in the continental United States opened to great fanfare in suburban Minneapolis, Minnesota. Dubbed the Mall of America (MOA), this sprawling retail center enjoyed 330 stores, anchored by retail tenants at the height of their reputations: Macy’s, Bloomingdale’s, Nordstrom, and Sears Roebuck and Co. (Sears).
De rechtbank Noord-Holland heeft recent beslist dat een moeder en zoon aansprakelijk zijn voor het boedeltekort van een failliet beleggingsfonds omdat zij hun taak als (defacto) bestuur onbehoorlijk hebben vervuld (Rechtbank Noord-Holland 8 februari 2023, ECLI:NL:RBNHO:2023:1723).
On April 19, 2023, the United States Supreme Court issued its decision in MOAC Mall Holdings LLC v. Transform Holdco LLC, in which the Court considered whether 11 U.S.C. § 363(m) is jurisdictional. A unanimous Court held that § 363(m) is not jurisdictional, determining that the language of the statute “takes as a given the exercise of judicial power over any authorization under § 363(b) or § 363(c).” This determination is based upon the requirement that for a statutory precondition to be jurisdictional, Congress must clearly state the intent.
Federal Bill C-2281 (the Bill), new legislation intended to improve the protection of, and to extend the super-priority given to claims relating to, defined benefit pension plans in insolvency proceedings, completed third reading in the Senate on April 18, 2023 and is now awaiting Royal Assent before it becomes effective. The Bill is the result of a private members' bill, which was passed by the House of Commons in late 2022.
On April 19, 2023, the Supreme Court, in a unanimous opinion written by Justice Ketanji Brown Jackson in MOAC Mall Holdings LLC, ruled Bankruptcy Code section 363(m) to be non-jurisdictional, i.e. just a “mere restriction on the effects of a valid exercise” of judicial power “when a party successfully appeals a covered authorization.” Before MOAC, the Third, Sixth, Seventh, Ninth, Tenth and Eleventh Circuits held section 363(m) to be non-jurisdictional, but the Fifth and Second Circuits had diverged.
Reasoning
In a ruling issued just yesterday, MOAC Mall Holdings LLC v. Transform Holdco LLC et al., 598 U.S. ----, 2023 WL 2992693 (2023) (“MOAC”), the United States Supreme Court (the “Supreme Court”) held that Bankruptcy Code section 363(m) is not jurisdictional in terms of appellate review of asset sale orders, but rather, that such section only contains limitations on the relief that may be afforded on appeal. Section 363(m) of the Bankruptcy Code is often relied upon by purchasers of assets in a bankruptcy case as providing finality to any sale order.
The Law Amending the Enforcement and Bankruptcy Law and Certain Laws ("Amendment Law"), known as the 7th Judicial Package, was published in the Official Gazette (32154) dated 05 April 2023 and entered into force except for several provisions with later effective dates.
The Amendment Law sets out several changes in the fields of enforcement law, criminal law, and procedural law, and it expands the scope of mandatory mediation significantly. Some of the prominent amendments introduced by the Amendment Law are examined below: