The Jevic Holding Corp. bankruptcy case is proving to be precedent setting.  In a prior post, we examined how the court had greatly increased the evidentiary burden on a party seeking to hold one company liable for the debts of another company under a “single employer” theory.  That ruling was seen as a boon for private equity firms who were oftentimes the target of Chapter 11 creditor

In a highly anticipated decision, the Bankruptcy Court for the Southern District of New York (the "Court") on June 28, 2016, dismissed Counts I through XIX of Lehman Brothers Special Financing Inc.'s ("LBSF") fourth amended complaint (the "Complaint") in Lehman Bros. Special Fin. Inc. v. Bank of America, N.A., et al.1 In doing so, the Court removed the majority of the approximately 250 noteholder, issuer and indenture trustee defendants from the LBSF lawsuit to recover over $1 billion distributed in connection with 44 swap transactions.

Today’s post covers a recent decision by the United States Bankruptcy Court for the Southern District of Texas in the Chiron Equities, LLCcase. In that case, the court ordered a preliminary injunction to stop non-bankruptcy court litigation in a dispute between a majority shareholder, a minority shareholder, and his wife.

On June 28, 2016, the U.S. Supreme Court agreed to hear a challenge to a Third Circuit-affirmed settlement and dismissal of the chapter 11 cases of Jevic Transportation, Inc. (“Jevic”) and certain of its affiliates. SeeOfficial Comm. of Unsecured Creditors v. CIT Grp./Bus. Credit Inc. (In re Jevic Holding Corp.), 787 F.3d 173 (3d Cir. 2015), cert. grantedCzyzewski v. Jevic Holding Corp., No. 15-649, 2016 WL 3496769 (U.S. 2016).

(E.D. Ky. July 8, 2016)

The district court affirms the bankruptcy court’s decision finding the debt dischargeable. The debtor sold a television to the plaintiffs, claiming it was a “high definition” television.The plaintiffs disputed that characterization and obtained a judgment in state court for the purchase price plus punitive damages. However, the court finds that the plaintiffs failed to meet their burden of proof in showing the requisite elements of § 523(a)(2)(A). Opinion below.

Judge: Schaaf

(W.D. Ky. July 7, 2016)

We at The Bankruptcy Cave applaud the recent ruling by Judge Whipple of the Bankruptcy Court for the Northern District of Ohio, seeking to make the post-confirmation parties, processes, and procedures far more transparent. In In re Affordable Med Scrubs, LLC,[1] Judge Whipple declined to approve a disclosure statement for a debtor’s liquidating plan.

Like most companies that file for chapter 11 protection, many debtors in the health care industry may have outstanding liabilities that have not been finally adjudicated as of the petition date. This can include tort claims based on allegations of medical malpractice, elder abuse, patient dumping, violations of a patient’s bill of right or various other allegations of improper care. Bankruptcy courts can estimate the value of these claims to facilitate the speedy confirmation of a debtor’s plan without subjecting the debtor to a lengthy trial during its restructuring.

HIGHLIGHTS:

As we have discussed in prior blog posts, The Battle of the Student Loan Discharge, The Eternal Pursuit to Collect: Due Process Rights and Actions to Collect on a Debtor’s Defaulted Student Loans