The "common interest" doctrine allows attorneys representing different clients with aligned legal interests to share information and documents without waiving the work-product doctrine or attorney-client privilege. Issues involving the common-interest doctrine often arise during the course of a business restructuring, because restructurings tend to involve various constituencies, including the company, the official committee of unsecured creditors, secured debt holders, other creditors, and equity holders whose legal interests may be aligned at any one time.

Earlier this month, in Rea v. Federated Investors, 2010 U.S. App. LEXIS 25501 (Dec. 15, 2010), the United States Court of Appeals for the Third Circuit held that while federal law prohibits a private employer from firing or discriminating against an employee who files or has filed for bankruptcy, it does not prohibit a private employer from denying employment to someone simply because he had filed for bankruptcy in the past. Thus, 11 U.S.C. § 525(b) does not create a cause of action against private employers who engage in discriminatory hiring.

The early 2000s witnessed a wave of chapter 11 filings by entities with liability for asbestos personal-injury claims. The large number of filings was matched by the variety of legal strategies that companies pursued to address their asbestos liabilities in chapter 11. The chapter 11 case of Quigley Company, Inc. ("Quigley"), was one of the last large asbestos cases to file in the 2000s and represents one of the more interesting strategies for dealing with asbestos liabilities in chapter 11.

Regional landline network operator Fairpoint Communications is finally poised to emerge from Chapter 11 bankruptcy as a result of the decision of the Vermont Public Safety Board (VPSB) to approve the company’s amended reorganization plan. Vermont had been the lone holdout among Maine, New Hampshire and 15 other states that had previously endorsed the plan. The reorganization was precipitated largely by the financial burden of FairPoint’s $2.3 billion purchase of New England landlines from Verizon Communications in 2008.

Introduction

With the flood of debt-heavy capital structures created over the past decade, bankruptcy courts have been left to clean up the remnants of many failed transactions. Given the volume of debt provided, courts are likely to continue to be called upon to determine the relative rights of creditors that result from multi-tiered debt structures.

In the July/August 2010 edition of the Business Restructuring Review (Vol. 9, No. 4), we reported on significant changes to Rule 2019 of the Federal Rules of Bankruptcy Procedure ("Rule 2019") recommended by the Advisory Committee on Bankruptcy Rules (the "Rules Committee").

In nearly every bankruptcy proceeding there is some constituency that ends up having its claim or interest impaired. Not surprisingly, therefore, these same constituencies would like to avoid that outcome by restricting the debtor’s ability to commence bankruptcy in the first place.

A recent decision may provide important ammunition to Madoff investors against "clawback" actions brought by the SIPC Trustee overseeing the Madoff bankruptcy estate (the "Madoff Trustee").1 The Madoff Trustee alleges that investors who withdrew monies from their accounts fraudulently transferred estate property under state and federal law, regardless of whether they lost more than they withdrew.

Introduction