The immediate effect of Jevic will be that practitioners may no longer structure dismissals in any manner that deviates from the priority scheme of the Bankruptcy Code without the consent of impaired creditors.
In a 33 page decision released March 29, 2017, Judge Sontchi of the Delaware Bankruptcy Court ruled on competing motions to dismiss the remaining claims and counterclaims in an adversary proceeding in the Affirmative Insurance bankruptcy – Adversary Proceeding Case No. 16-50425.
On March 22, 2017, the Supreme Court of the United States decided Czyzewski v. Jevic Holding Corp., 580 U.S. __ (2017), holding that a bankruptcy court may not use a structured dismissal of a chapter 11 case to approve a distribution scheme that violates the absolute priority rule. In many middle-market cases, chapter 11 debtors had used this tool to get deals done and reorganize, despite their inability to confirm a chapter 11 plan.
On February 27, 2017, the United States Court of Appeals for the Tenth Circuit joined a minority approach followed by District of Columbia Circuit: failing to turn over property after demand is not a violation of the automatic stay imposed by 11 U.S.C. § 362. WD Equipment v. Cowen (In re Cowen), No. 15-1413, — F.3d —-, 2017 WL 745596 (10th Cir. Feb. 27, 2017), opinion here.
Value of Determining Critical Vendors
As defined in bankruptcy lexicon, critical vendors are those that are vital to a Debtor’s continued operations. A critical vendor provides goods or services that cannot be easily and efficiently replaced, or rather a vendor with a specialized skillset, mandatory safety certification or proprietary product whose discontinuation of service would have a significant negative impact on a Debtor’s operations.
Ten Cardinal Rules for a Proper Repossession Author: Franklin Drake Smith Debnam Narron Drake Saintsing & Myers LLP Raleigh, North Carolina WHITEPAPER TEN CARDINAL RULES FOR A PROPER REPOSSESSION by Franklin Drake Introduction: Creditors too often expose themselves needlessly to disgruntled debtors' claims for wrongful repossession. Avoiding the legal expense of defending such claims is just a matter of correct procedures and common sense. Here are 10 common sins and how to stay righteous. I. BE SURE YOU REALLY DO HAVE AN ENFORCEABLE LIEN ON THE GOODS! A.
It is commonly understood that, upon commencement of a bankruptcy case, section 362 of the Bankruptcy Code operates as an automatic statutory injunction against a wide variety of creditor actions and activities.
On February 28, 2017, Judge Sontchi of the Delaware Bankruptcy Court issued an opinion (the “Opinion”) in the Money Center of America bankruptcy – Bankr. D. Del., Case 14-10603. The Opinion is available here. This Opinion decided two separate, but similar, motions to dismiss filed by 2 entities owned by federally recognized Indian Tribes and sovereign nations (the “Tribes”).
Since February 2016, the Local Rules for the United States Bankruptcy Court for the District of Delaware provide for combined hearings on approval of disclosure statements and confirmation of plans and for the use of combined disclosure statement and plans in liquidating chapter 11 cases.
The United States Bankruptcy Court for the Eastern District of Michigan recently allowed a debtor to modify his confirmed Chapter 13 plan based upon a mistake by the debtor’s counsel. The result of the modification was to reduce the plan to 36 months from 60 and reduce the repayment to unsecured creditors by 80 percent.
A copy of In re Luman is available at: Link to Opinion.